Determinants of Supply
The term “determinants of supply” refers to the factors that influence the quantity of a good or service that a producer is willing to supply. These factors include the price of the good or service, the cost of production, the number of suppliers, the availability of resources, and the level of technology. The determinants of supply are important to understand when analyzing the market for a particular good or service.
History of Determinants of Supply
The concept of determinants of supply has been around since the early days of economics. In the 18th century, Adam Smith wrote about the “invisible hand” of the market, which he believed was responsible for the efficient allocation of resources. In the 19th century, Alfred Marshall wrote about the determinants of supply in his book Principles of Economics. He argued that the price of a good or service was determined by the cost of production, the number of suppliers, and the availability of resources.
Comparison of Determinants of Supply
| Factor | Price | Cost of Production | Number of Suppliers | Availability of Resources | Level of Technology |
|---|---|---|---|---|---|
| Influence on Quantity Supplied | Positive | Negative | Positive | Positive | Positive |
Summary
The determinants of supply are the factors that influence the quantity of a good or service that a producer is willing to supply. These factors include the price of the good or service, the cost of production, the number of suppliers, the availability of resources, and the level of technology. For more information about the determinants of supply, you can visit websites such as Investopedia, The Balance, and Economics Online.
See Also
- Demand
- Price Elasticity of Supply
- Law of Supply
- Supply Curve
- Cost of Production
- Marginal Cost
- Marginal Revenue
- Opportunity Cost
- Economies of Scale
- Market Equilibrium
