0
The determinants of supply are: technology, input prices, number of suppliers, expectations, and changes in prices of other products. Technology allows firms to produce more at the same or at a lower cost. This decreases the marginal cost of a firm and increases the market supply. Input prices are the costs of the factors needed to produce the good. Labor, materials, rent costs are all input prices. If input prices increase, supply will decrease because it is more costly for a given firm to supply the same amount of goods. Input prices can be pretty flighty as most prices of commodities can change over night. If there are more suppliers, the market supply curve will shift to the right lowering price and increasing quantity. If there are less suppliers the market supply curve will shift to the left increasing price and decreasing quantity. If expectations state that the price of a good will increase, suppliers will withhold their good until the price increases therefore decreasing supply. If expectations state that the price of a good will decrease, suppliers will try to sell off their good therefore increasing supply.
The change in complements and substitutes are important for suppliers too. If a firm produces a plethora of products, it must judge which products to produce more based on the competitive market price. If a furniture store sees an increase in price for chairs it will shift its production toward chairs and away from sofas. The same logic applies to if the housing market is booming then the firm should look to produce more of all furniture because houses and furniture are complements.
What else can I help you with?
What factors determine money supply?
factors which determine money supply is: open market operations, variable money supply bank rate policy.
How do buyers and sellers determine prices?
Buyers don't determine prices directly unless at a lcoal market/yard sale. Sellers determine the price of an object by factors such as supply, demand, and maximum profit.
What are factors that influence supply?
what are the factors that influence supply
What factors determine the shape of the long run supply curve in perfect competition?
The shape of the long run supply curve in perfect competition is determined by factors such as technology, input prices, and economies of scale. These factors influence the ability of firms to produce goods efficiently and at different levels of output, which in turn affects the overall shape of the supply curve.
What is another word for supply and demand?
Another word for supply and demand is "market forces." This term refers to the economic factors that influence the availability of goods and services (supply) and the desire for them (demand), which together determine prices in a market economy.
What factors determine money supply?
factors which determine money supply is: open market operations, variable money supply bank rate policy.
What two factors determine market structure?
demand and supply
What Two main factors that determine price?
The two main factors that determine price are supply and demand. When supply increases or demand decreases, prices tend to fall. Conversely, when supply decreases or demand increases, prices tend to rise.
What factors determine whether a species can be presented in a place?
The weather,food supply
How do buyers and sellers determine prices?
Buyers don't determine prices directly unless at a lcoal market/yard sale. Sellers determine the price of an object by factors such as supply, demand, and maximum profit.
What are factors that influence supply?
what are the factors that influence supply
What factors determine the shape of the long run supply curve in perfect competition?
The shape of the long run supply curve in perfect competition is determined by factors such as technology, input prices, and economies of scale. These factors influence the ability of firms to produce goods efficiently and at different levels of output, which in turn affects the overall shape of the supply curve.
What is another word for supply and demand?
Another word for supply and demand is "market forces." This term refers to the economic factors that influence the availability of goods and services (supply) and the desire for them (demand), which together determine prices in a market economy.
What factors determine the outcome of the war?
US unlimited production of war material and unlimited supply of manpower.
What are the factors that determine the length of an engagement?
What are the factors that determine the length of an engagement?
How can supply and demand of a material cause a material to become an ore?
it's not possible.
What are the key factors that influence the dynamics of the supply and demand game in the market?
The key factors that influence the dynamics of supply and demand in the market include consumer preferences, prices of goods and services, production costs, competition among producers, government regulations, and external factors such as economic conditions and technological advancements. These factors interact to determine the equilibrium price and quantity of goods and services in the market.
