Shifts in the Supply curve

Shifts in the Supply curve

Shifts in the supply curve are caused by factors other than the price of the product changing.

Shifts in the market supply curve

Possible causes for a shift in supply curve are:

  • Other products’ production(If the size of the industry increases, because there are more firms or bigger firms, then it is likely that the supply of the industry will increase)
  • The cost of factors of production(1.Wage rates 2.Worker productivity (output per worker) 3.Raw material and component prices 4.Energy costs 5.Equipment maintenance costs 6.Transport costs 7.The state of technology)
  • Supply of resources
  • Technical progress and improvements in production processes and machinery
  • Business optimism and expectations of profit
  • The government subsidizes production and/or changes taxes on profits
  • Other factors, e.g. good weather boosts crop harvests and vice versa

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