Factors that affect supply, there are 4

Factors that affect supply, there are 4
Factors that affect supply, there are 4

Factors affecting supply. Supply is the quantity and quality of goods that producers want to sell to buyers under certain conditions. If the price of goods or services is higher, the greater the quantity of basic products that producers will offer. Vice versa.

According to Usep Sudrajat and Suwaji in the Managerial Economics Textbook (2018), supply is the quantity of products that producers are willing and able to supply at a given price level.

There are a number of factors that affect supply in the market. This factor also influences the decision of producers to sell or not their goods and services.

Factors Influencing Supply

The factors that affect supply are:

  1. The price of the item itself.
  2. The price of other similar items.
  3. Production cost
  4. Technology.
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Production cost

The higher the cost of producing an item, the less profit or profit the producer makes. Vice versa.

If costs increase, producers tend to reduce production or supply. Because profits will be reduced.

Technology

The rapid development of technology definitely affects the productive activities. The production in question is the production technique and machinery.

In the production of goods or services, the presence of technology will create efficiency. Because advances in technology will increase the amount of goods produced and reduce costs.

The price of the item itself.

Quoted from the book Basic Aspects of Microeconomics (2006) by Tri Kunawangsih Pracoyo and Antyo Pracoyo, this factor is related to the law of supply.

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The higher the price of an item, the more goods are offered. On the other hand, if the price is low, the quantity supplied will decrease.

From the law of supply, it can be seen and concluded that the price of the good itself can affect supply.

The price of other similar items.

If the price of other similar goods is cheaper than that of one good, it is certain that the supply of other goods will be greater.

For example, the price of bricks as a substitute for red bricks has increased. Manufacturers began to switch to brick production, so the supply of red bricks would decrease.

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Production cost

The higher the cost of producing an item, the less profit or profit the producer makes. Vice versa.

If costs increase, producers tend to reduce production or supply. Because profits will be reduced.

Technology

The rapid development of technology definitely affects the productive activities. The production in question is the production technique and machinery.

In the production of goods or services, the presence of technology will create efficiency. Because advances in technology will increase the amount of goods produced and reduce costs.

The publication Factors Affecting Supply, Ada 4 appeared first in Fajar Pendidikan.