What are the determinants of supply? How is the supply curve impacted by changes in determinants? What is the difference between a change in supply and a change in the quantity supplied and what are the causes of each?
Determinants of Supply
There are numerous determinants of supply. These could be any or a combination of the following factors: selling price change, prices of raw materials, changes in expectation, change in technology, changes in salaries and wages, changes in organization, weather, industrial turmoil, among others.
So how these factors alter the supply curve?
Selling price change - an increase in the selling price will encourage entrepreneurs to sell more product or services. This will result to a rightward shift of the entire supply curve denoting an increase in supply of goods or services.
Prices of raw materials - any increase in production input will discourage businesses to produce hence a decline in supply resulting to a leftward shift of the supply curve.
Changes in ...
This dissects and specifies the determinants of supply and what causes it to change. Included is also a discussion on the difference between a change in supply and a change in the quantity supplied.