Supply factors that influence supply curve

Question 1

What are the factors which affect supply?

Answer 1

cost of production, technological change, productivity growth, and climatic condition.

Question 2

Climatic conditions and the impact on supply

Answer 2

favourable weather conditions can decrease the availability of resources

Question 3

Costs of production and the affect on supply

Answer 3

an increase in costs can decrease supply

Question 4

Technological change and the impact on supply

Answer 4

the use of new technology can lift efficiency and therefore cut average production costs

Question 5

Productivity growth and the impact on supply

Answer 5

growth in productivity is a situation where a greater quantity of goods and services can be produced from the same quantity of resources. Productivity growth would equal an increase in supply

Question 6

What is the law of supply?

Answer 6

states that as the price of a product increases the total quantity supplied increased

Question 7

Definition of supply

Answer 7

the willingness and ability of producers to sell a product at a given price

Question 8

How does a shift to the right in supply occur and how will the market adjust?

Answer 8

A shift to the right of the supply curves occurs as a result of a non-price factor e.g. technological change. The increased supply will cause a market surplus and as a result, the price will decrease, creating a new equilibrium