Price Determination In Compt Market (3)

Question 1

Cost of production on the supply curves

Answer 1

If cost of production rises, goods being supplied become less profitable at each and every price level and decreases supply

If cost of production falls supply will increase at each and every price level

Question 2

Technical progress on the supply curve

Answer 2

If there is an improvement in the technology involved in the production of a particular good it should lower the cost per unit of supplying the goods. Increases supply

Question 3

Productivity effect on the supply curve

Answer 3

If productivity increases then, cost of production per unit will fall. Causes supply to increase at each and every price level