Published by: sadikshya
Published date: 02 Jul 2021
The various determinants of the shift in the supply curve as follow.
The supply of goods depends on their price. There is a direct and positive relationship between the price of goods and their supply.
The supply of particular goods is inversely related to the price of other goods such as the supply of wheat with a fall with the rise in the price of rice. This is due to the fact that a rise in the price of rice will increase producers to produce more rice consequently area under wheat activation will be decrease and supply will decline.
With the rise in the price of a factor of production, the cost of production also rises which results in an increase of supply and vice versa.
The change in technology or new discoveries brings a reduction in cost and an increase in production. This will increases the level of supply.
If the producer expected an increase in the price, there will withdraw goods from the market consequently, Supply will reduce if the price expected to fall in future the supply will naturally increase.
The supply of goods is a part of goods produces. It means that more production of goods will result in its more supply and vice-versa. Agricultural production depends upon various natural factors such as rain, fertility, climatic condition, etc. production may be adversely affected due to famine, heavy rain, drought, etc.
An adequate supply of a commodity is maintained if the means of transport and communication are developed. The scarcity of goods will be experienced in the domestic market if the means of transport and communication are not properly developed.
The production of the commodity is discouraged if heavy-duty on its production on is imposed. In the same way, tax concession encourages producers to increase supply.