Question

Describe five factors that may cause a shift in a good’s supply curve. Explain how other goods could impact the supply of a good.

Answer 1

Answer:

Cost of production, technology, weather, taxes, number of producers

Explanation:

a) Supply is the amount of goods that a supplier wants to supply to the market. The supply curve shows how much of a good or service sellers are willing to sell at any given price. Factors that cause a shift in a good’s supply curve are

1. Cost of production: When cost of production increases, the firm reduces supply shifting the supply curve to the left and vice versa for reduction in cost of production which shift the curve to the right.
2. Number of producers: An increase in number of producers leads to more supply shifting the supply curve to the right and decrease in number of producers shift the supply curve to the left
3. Technology:  Use of technology lead to more production and supply shifting the curve to the right.
4. Weather: bad weather lead to reduction in supply, shifting the curve to the left.
5. Lower taxes.: This reduce the cost of goods shifting the curve to the right

b) If another good is at a higher price providing more profit, the supply of the original good would fall while the supply of the other goods increases and vice versa.