Price and non-price factors influencing the amount of supply
Posted: Sun Dec 22, 2024 6:44 am
The offer is the seller's desire to sell the goods that he has produced or purchased in a certain period of time. The volume of the offer is directly dependent on the volume of production.
The supply growth is always determined by the marginality of the product itself. An example of the price factor of supply can be the following pattern: the cost price of the product is 120 rubles, and the price of its sale is 1000 rubles.
The following price and non-price supply telegram dating philippines factors have the greatest impact on the economics of any business:
Production costs. They include the cost of resources used by the company in the production of goods, wages of the enterprise's employees, interest on loans and credits, and the cost of raw materials. The profitability of production becomes much higher due to the reduction of similar costs.
Tax level. Among the price and non-price factors influencing supply, we can highlight the reduction of corporate taxes. This trend creates favorable conditions for supply growth.
Production technology . Technological progress does not stand still, its development leads to a reduction in the costs of creating goods, an increase in the efficiency of the organization and an increase in labor productivity, which has a positive effect on the dynamics of supply.
The economic expectations of producers are a huge incentive for efficient production and inevitably lead to an increase in supply.
Number of producers . Healthy and active competition in the market provokes an increase in supply, and monopolization in relation to a separate group of goods significantly reduces market supply.
Prices in related markets represent price factors of competition that can influence the increase or decrease of supply.
Price factors of supply change certainly influence its indicators, however, production costs or production expenses remain in first place among all other circumstances. Among practicing economists, there is an opinion that this factor is the main one in the issue of supply change.
Price and non-price factors
Source: shutterstock.com
Since the manufacturer a priori acts in its own interests and directs resources to obtain maximum profit, it makes a decision on the volume of manufactured products and their delivery to sales markets. An increase in production volume does not always entail an increase in profit. This is due to the fact that each organization has a growth limit, and, therefore, supply on the market beyond such growth provokes additional costs for transportation of goods, business management and sales of products.
Price and non-price factors of aggregate supply influence production costs and then supply volumes. However, this does not mean that resource costs in terms of the economic paradigm are equal to the sum of monetary production costs. Resources can be used in several areas, which is why an economist must take into account all possible options for their use. In this case, the production costs of resources must also include money received from one of the most profitable ways of implementing this resource.
The supply growth is always determined by the marginality of the product itself. An example of the price factor of supply can be the following pattern: the cost price of the product is 120 rubles, and the price of its sale is 1000 rubles.
The following price and non-price supply telegram dating philippines factors have the greatest impact on the economics of any business:
Production costs. They include the cost of resources used by the company in the production of goods, wages of the enterprise's employees, interest on loans and credits, and the cost of raw materials. The profitability of production becomes much higher due to the reduction of similar costs.
Tax level. Among the price and non-price factors influencing supply, we can highlight the reduction of corporate taxes. This trend creates favorable conditions for supply growth.
Production technology . Technological progress does not stand still, its development leads to a reduction in the costs of creating goods, an increase in the efficiency of the organization and an increase in labor productivity, which has a positive effect on the dynamics of supply.
The economic expectations of producers are a huge incentive for efficient production and inevitably lead to an increase in supply.
Number of producers . Healthy and active competition in the market provokes an increase in supply, and monopolization in relation to a separate group of goods significantly reduces market supply.
Prices in related markets represent price factors of competition that can influence the increase or decrease of supply.
Price factors of supply change certainly influence its indicators, however, production costs or production expenses remain in first place among all other circumstances. Among practicing economists, there is an opinion that this factor is the main one in the issue of supply change.
Price and non-price factors
Source: shutterstock.com
Since the manufacturer a priori acts in its own interests and directs resources to obtain maximum profit, it makes a decision on the volume of manufactured products and their delivery to sales markets. An increase in production volume does not always entail an increase in profit. This is due to the fact that each organization has a growth limit, and, therefore, supply on the market beyond such growth provokes additional costs for transportation of goods, business management and sales of products.
Price and non-price factors of aggregate supply influence production costs and then supply volumes. However, this does not mean that resource costs in terms of the economic paradigm are equal to the sum of monetary production costs. Resources can be used in several areas, which is why an economist must take into account all possible options for their use. In this case, the production costs of resources must also include money received from one of the most profitable ways of implementing this resource.