Factors affecting supply
1.The price of the commodity :
The higher the price of a commodity , the greater the quantity supplied and the lower the price the lesser the quantity supplied
2.The prices of other commodities :
This affects goods that are in close substitute . All things being equal the supply of one commodity would fall as the price of its substitute rises
- Weather conditions :
This mostly affects the supply of agriculture product variation in weather condition will either increase or reduce supply . Bad weather condition will reduce supply and good weather condition will increase the supply , Natural factors such as floods , drought , storms and hurricanes can affect supply negatively .
4.Cost of production :
An increase in the cost f production without a corresponding increase in the price of the goods , will reduce the supply of the goods into the market .A decrease in the cost of production with or without a corresponding increase in the price of goods will lead to an increase in the supply of the goods into the market
5.state of technology :
Technological development facilitate division of labour and division of labour makes possible mass production .Where the state of technology is low in the
Production of a good , the supply will be low and when it is high the supply of the good produce will be high .
6.Government policy :
The government mainly influence the supply by providing or granting subsidies to industrialist subsidies reduce the cost of production and consequently increase the supply of the good in the market .On the other hand government policy can reduce the supply of a commodity through the imposition of positive taxes such as cooperation tax an industries or firms .Cooperative tax will increase the cost of production and consequently the supply of the good into the market will reduce since production will be down all things being equal .
7.Political factors :
During a period of political stability , move goods are produced and supply but when there is political instability such as wars and social wrest less goods are produced and supply
8.Time factors :
This mostly affect agricultural products .The supply of agricultural product will increase in a long run than in a short run since it takes time to produce agricultural products
9.The consumption pattern :
When there is a change in the consumption pattern in favor of a product, the supply of the product will increase , On the other hand a change in the consumption pattern in disfavor of a commodity will reduce supply of the commodity into the market.