Factors That May Shift The Supply Curve

Question 1

5 factors on a shift of supply curve

Answer 1

1. Production cost
2. Indirect Tax
3. Subsidy
4. Changes in technology
5. Natural factors

Question 2

How does the supply curve gets affected by production cost?

Answer 2

As production cost increase => supply decreases (Curve shifts to left)
As production cost decreases => supply increases (Curve shifts to right)

Question 3

How does the supply curve gets affected by indirect tax?

Answer 3

As indirect tax rises => supply decreases (Curve shifts to left)
As indirect tax lowers => supply increases (Curve shifts to right)

Question 4

How does the supply curve gets affected by Subsidy?

Answer 4

As more subsidies are provided => supply increases (Curve shifts to right)
As less subsidies are provided => supply decreases (Curve shifts to left)

Question 5

How does the supply curve gets affected by changes in technology?

Answer 5

As technology improves => supply increases (Curve shifts to right)
As technologly isn’t effective or slow improvement => supply decreases (Curve shifts to left)

Question 6

How does the supply curve gets affected by natural factors?

Answer 6

As natural disasaters take place => supply decreases (Curve shifts to left)
As less natural disasters occur => supply increases (Curve shifts to right)

Question 7

What should a 6 marker supply curve question should include?

Answer 7

Definition of supply curve
If given the diagram, use the diagram and information in it
According to question, use the factors given above and how it effects
If not given the diagram, draw it