Managerial Economics - Supply Analysis
Determinants Of Supply - Supply Analysis
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The cost of factors of production: Cost depends on the price of factors. Increase in factor cost increases the cost of production, and reduces supply.
Determinants Of Supply
1. The cost of factors of production: Cost depends on the price of factors. Increase in factor cost increases the cost of production, and reduces supply.
2.
The state of technology: Use of advanced technology increases productivity of the organization
and increases its supply.
3.
External factors: External factors like weather influence the supply. If there is a
flood, this reduces supply of various agricultural products.
4. Tax and
subsidy: Increase in government subsidies results in
5. Transport: Better transport facilities will increase the supply.
6. Price: If the prices are high, the sellers are willing to supply more goods to increase their profit.
7.
Price of other goods: The price of other goods is more than ‘X’ then the supply of ‘X’ will
be increased.
1. The cost of factors of production: Cost depends on the price of factors. Increase in factor cost increases the cost of production, and reduces supply.
5. Transport: Better transport facilities will increase the supply.
6. Price: If the prices are high, the sellers are willing to supply more goods to increase their profit.
Tags : Managerial Economics - Supply Analysis
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