CHANGE IN SUPPLY (Shift in Supply curve)

Change in supply refers to the supply of a commodity change due to change in any factors other than the own price of the commodity.

A change in supply refers to a shift in the entire supply curve.

In this case, the entire supply curve moves left or right.

Reasons for Shift in supply curve

1. Change in the state of technology.

2. Change in the price of factors of production.

3. Change in the number of firms in the market.

4. Change in the goals of the firm.

5. Change in the seller’s expectations regarding future prices.

6. Change in the tax and subsidy policy

7. Change in the price of other goods.

8. Change in the Transport and Communication Conditions.

SUPPLY AND ITS DETERMINANTS/FACTORS AFFECTING SUPPLY

CHANGE IN SUPPLY (Shift in Supply curve)

Increase in Supply

Increase in Supply refers to a rise in the supply  of a commodity  due to change in  any factors other than own price of the commodity.

Due to Favourable Change in any other  factors at the same price In this case, the supply curve shifts  rightward .

Reasons for Rightward Shift supply curve

1. Improvement in the technology.

2. Decrease in price of factors of production.

3. Increase in the number of firms in the market.

4. Change in the goals of the firm ( Sales Maximization).

5. Expectation of fall in prices in future

6. Decrease in taxes

7. Decrease in the price of other goods.

8. Improvement in the Transport and Communication Conditions.

CHANGE IN SUPPLY (Shift in Supply curve)

Decrease in Supply

Decrease in Supply refers to the  quantity supplied  of a commodity falls  due to change in  any factors other than own price of the commodity.

Due to Unfavourable change in other  factors at the same price In this case, the supply curve shifts  leftward.

Reasons for Leftward Shift supply curve

1. Outdated technology.

2. Increase in price of factors of production.

3. Decrease in the number of firms in the market.

4. Change in the goals of the firm ( Profit Maximization).

5. Expectation of rise in prices in future

6. Increase in taxes

7. Increase in the price of other goods.

8. poor Transport and Communication Conditions

CHANGE IN SUPPLY (Shift in Supply curve)

Preparation of Journal, Ledger, Trial balance and Financial Statements of a partnership firm on the basis of a case study- 15 Transactions

SUPPLY

Supply refers to the quantity of a commodity that a firm/producer is willing and able to offer for sale, at each possible price during a particular or given period of time.

ESSENTIAL ELEMENTS OF SUPPLY

1. Quantities of the commodity
2. Willingness to sell
3. Price of the commodity
4. Particular Period of time
5. Supply is a flow concept

INDIVIDUAL SUPPLY

Individual Supply refers to the quantity of a commodity that a firm /producer is willing and able to offer for sale, at each possible price during a particular or given period of time.

MARKET SUPPLY

Market Supply refers to the quantity of a commodity that all the firm/all the producer are  willing and able to offer for sale, at each possible price during a particular or given period of time.

DETERMINANTS OF SUPPLY/ FACTORS AFFECTING SUPPLY

The factors which affect the Supply for a commodity are known as determinants of supply .  A change in any one of these factors will results in change in supply .The Important determinants  of supply as follows:-

1. Price of the commodity
2. Price of Related Goods
3. Prices of factor of production/Cost of Production
4. State of technology
5. Goals or objectives of the firm
6. Number of firms
7. Means of transportation and communication
8. Future Expectations of Rise in Price
9. Government Policy
10. Agreement among the producer

ALSO READ: DEMAMD AND TYPES OF DEMAND