Economics explained
Category:
Demand and supply
Factors influencing supply
The secret to scoring awesome grades in economics is to have corresponding awesome notes.
A common pitfall for students is to lose themselves in a sea of notes: personal notes, teacher notes, online notes textbooks, etc... This happens when one has too many sources to revise from! Why not solve this problem by having one reliable source of notes? This is where we can help.
What makes TooLazyToStudy notes different?
Our notes:
-
are clear and concise and relevant
-
is set in an engaging template to facilitate memorisation
-
cover all the important topics in the O level, AS level and A level syllabus
-
are editable, feel free to make additions or to rephrase sentences in your own words!
Looking for live explanations of these notes? Enrol now for FREE tuition!
Costs:
The higher the costs of production, the less profit will be made at any price. As costs rise, firms will cut back on production, probably switching to alternative products whose costs have not risen so much
Examples: cost of energy, labour and transport.
Size and nature of the industry:
If an industry is growing in size, then more will be supplied to the market.
If new firms enter the market, supply is likely to increase.
The profitability of alternative products (substitutes in supply).
If a product which is a substitute in supply becomes more profitable to supply than before, producers are likely to switch from the first good to this alternative.
Government policy
Taxes imposed on the supplier of a product add to the costs of production. Therefore the imposition of taxes on a product reduces its supply, shifting the supply curve to the left. Subsidies are a form of financial assistance from the government to help encourage output by reducing the costs of production.
Change in technology
Technological advances such as automation, computers and wireless internet mean that there can be greater levels of output at every price level. Hence, technological progress will tend to shift the supply curve to the right.
Other factors
Other factors would include the weather and diseases affecting farm output, wars affecting the supply of imported raw materials, the breakdown of machinery, fire etc.