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An Increase of Suppliers Results and a Shift of the Supply Curve - Assignment Example

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The paper “An Increase of Suppliers Results and a Shift of the Supply Curve” seeks to evaluate the quantity demanded and quantity supplied of the services and products. The paper will discuss how a decrease in price caused by an increase in the number of suppliers shifts the supply curve…
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An Increase of Suppliers Results and a Shift of the Supply Curve
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Download file to see previous pages Supply is the amount of goods manufacturers or suppliers are willing to sell at a certain price (Colander, 2008). The law of supply says that the higher the price of a product, the more the quantity suppliers or firms will be willing to produce and sell (Hall & Lieberman, 2012). Supply is usually plotted as a supply curve demonstrating the link between price and the amount of products producers are ready to bring to the market and sell. As a result, it slopes from left to right.
There are various factors that affect supply, First is the technology used to produce the good. If a firm uses advanced technologies to produce the product, more products will be manufactured increasing supply. Secondly is the price of the product. There is a proportional relationship between price and supply. If the price of a commodity increase, it will result in a proportionate increase in the quantities supplied. The third is the number of firms. When the number of manufacturers increases, there are more suppliers in the market leading to a drop in the price of the commodities supplied. Next is the price of alternative goods (Varian, 2009). When the price of an alternative good rise, the manufacturers find it profitable increasing production. Fifth are the future expectations of the producers. When the producers are looking forward to an increase in price in the future, they can increase their production so as to earn more profits in the future (Perloff, 2007). Consequently, the supply increases. Sixth is the price of inputs also affect supply. Goodwin, Nelson, Ackerman, and Weissskopf (2009) observe that an increase in the price of land, labor, and raw materials. ...Download file to see next pagesRead More
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