Production Analysis — Economics STD 11 — Question

1. Price of the commodity:
The higher the price larger the supply Price is the incentive for the producers and sellers to supply more
.2. Price of other commodities:
The supply of a commodity not only depends upon its price but also the prices of other commodities. For instance, if the price of commercial crops increases, the supply of food crops may decrease
.3. Price of factors:
When the input prices go up, this results in rising in cost and so supply will be affected.
4. Price expectations:
The expectation over future prices determines present supply.
5. Technology:
With the advancement in technology, production level improves average cost declines, and as a result supply level increases.
6. Natural factors:
In agriculture, natural factors like a monsoon, climate, etc., play a vital role in determining the production level
.7. Discovery of new raw materials:
The discovery of cheaper and high-quality raw materials tends to increase the supply of the product.
8. Taxes and subsidies:
Subsidies encourage the producers to produce more whereas taxes kill the ability and willingness to produce more.
9. The objective of the firm:
When the goal of the firm is sales maximization or improving market share, the supply of the product is likely to be highe