Question

In an answer of at least two well-developed paragraphs, provide a definition of the law of supply, and describe the factors that will cause a shift in the supply of a product. Provide an example of your own that illustrates how these factors affect supply.

Answer 1

The law of supply states that the price of services and goods increases, its factors being equal, the offer of quantity goods and services increases.

If the price goes up the supplier maximizes profits by way of increasing the quantity which is being offered for sale. Factors which include supply are,

1. Cost of production. When the supply of a certain product decreases then its cost product increases.

2. Natural condition. Climate mostly affects supply of different products. For example, when monsoon comes, there is an increase in agriculture products.

3. Technology. When technology is high there is increase in products and also increase in supply.

A good example which illustrates the factors of law of supply, lets say when a student who is in college finds that a course like actuarial science pays well than professor job then there will be supply of students and actuarial science will increase mor student who will be doing it.