eBookReferencesCheck my workCheck My Work button is now disabledItem 4 Time Remaining 59 minutes 53 seconds00:59:53What are the determinants of supply?Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. check all that applyIncomeunansweredPrice of related goodsTechnologyTastes and preferencesResource pricesNumber of producersIndicate whether a change in the value of each of the following determinants of supply leads to a movement along the supply curve or a shift in the supply curve.i. Change in market price: ii. Change in factor productivity: iii. Change in producer expectations: iv. Change in the price of other goods: v. Change in technology: vi. Change in resource prices: vii. Change in taxes: Given the following diagram, indicate whether these changes represent a change in supply or a change in quantity supplied. A change from point A to point B = A change from point A to point C =
Question
eBookReferencesCheck my workCheck My Work button is now disabledItem 4 Time Remaining 59 minutes 53 seconds00:59:53What are the determinants of supply?Instructions: You may select more than one answer. Click the box with a check mark for correct answers and click to empty the box for the wrong answers. check all that applyIncomeunansweredPrice of related goodsTechnologyTastes and preferencesResource pricesNumber of producersIndicate whether a change in the value of each of the following determinants of supply leads to a movement along the supply curve or a shift in the supply curve.i. Change in market price: ii. Change in factor productivity: iii. Change in producer expectations: iv. Change in the price of other goods: v. Change in technology: vi. Change in resource prices: vii. Change in taxes: Given the following diagram, indicate whether these changes represent a change in supply or a change in quantity supplied. A change from point A to point B = A change from point A to point C =
Solution
The determinants of supply are:
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Price of the product: If the price of the product increases, suppliers will be willing to supply more of the product, and vice versa.
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Price of related goods: If the price of a substitute good increases, suppliers may switch to producing that good instead. Similarly, if the price of a complementary good increases, suppliers may produce more of the initial good.
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Technology: Advances in technology can make production more efficient, increasing supply.
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Resource prices: If the cost of resources (like labor, raw materials, etc.) used in production increases, the supply will decrease as it becomes more expensive to produce the same quantity of the product.
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Number of producers: The more producers there are in the market, the greater the supply.
Now, let's discuss whether a change in the value of each of these determinants leads to a movement along the supply curve or a shift in the supply curve.
i. Change in market price: This leads to a movement along the supply curve. ii. Change in factor productivity: This leads to a shift in the supply curve. iii. Change in producer expectations: This leads to a shift in the supply curve. iv. Change in the price of other goods: This leads to a shift in the supply curve. v. Change in technology: This leads to a shift in the supply curve. vi. Change in resource prices: This leads to a shift in the supply curve. vii. Change in taxes: This leads to a shift in the supply curve.
Regarding the diagram, without seeing it, I can tell you that:
- A change from point A to point B typically represents a change in quantity supplied (movement along the curve).
- A change from point A to point C typically represents a change in supply (shift of the curve).
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