What Is The Determinants of supply?


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mohamad shafi Profile
mohamad shafi answered
) price of the product-a producer is always aimed on maximizing his profit and minimizing his cost. A higher price increases his willingness to supply and vice-versa.2) technology changes-technology aids a producer in minimizing his cost of production; mass production is possible with technology3) resource supplies-the producer also has to pay for other resources such as raw materials and labor. If his money is short on supplying a certain number of products because of an increase in resource supplies, then he has to reduce his supply.4) tax/ subsidy-a producer aims to minimize his profit, but an increase in tax will only increase his expenses, decreasing his capacity to buy resource supplies and forcing him to reduce his supply.5) expectations about future price- again, the producer is aimed at maximizing his profit. An future decline in price would tell the producer to lessen his supply so that he will not endure a loss when the prices go down and vice-versa.6) price of other goods produced-a producer may not only produce on product but other products as well. A producer's money is limited and if he increases his supply in one product, he would have to decrease his supply in the other product, not unless his sales increase.

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