NON-PRICE

DETERMINANTS OF
SUPPLY
 1. PRICE OF PRODUCTION
INPUT
-Value added to raw materials
through the of production
 Intermediate input – raw materials; these are still to be processed or transformed into
higher levels of output.
EXAMPLE;
LUMBER
OIL
MINERAL
  
 FACTOR INPUT
 processing or transforming input
EXAMPLES;
LABOR
CAPITAL
LAND
PRODUCTION INPUT
COST OF PRODUCTION QS

PRODUCTION INPUT
COST OF PRODUCTION QS

- Producers create a method of combining factors of production in order to

create a product. Generally, it is the production costs that determines the supply
of the commodity.
- When the price of the factors of production increases, the minimum price
will increase, too. So we can say that an increase in the price of the factors of
production decreases supply and makes the supply curve to shift to left.
- Likewise, if the production cost decreases, producers will now have the
incentives to increase their production. this will result to rise in supply of the
commodity which will then make to supply curve to shift to the right.
 2. TAXES

MONETARY EXPENSE PAID TO THE GOVERNMENT

TAXES QS

3. TECHNOLOGY

-The manner in which factor input process intermediate inputs is done

through technology.

Improvement or discovery in technology

IMPROVED TECHNOLOGY (COST OF PRODUCTION) QS

OBSOLETE TECHNOLOGY (COST OF PRODUCTION) QS

- Improvement in the technology us in production will result any of
this two: number of produce goods or output will increase
without changing the quantity factors of production or firms will
need less resources of create the same quantity of products.

- If less materials or resources will be use to create the same level

of output when technology is improved, then there will be lower
costs of production which will result for the supply to increase. This
will make the supply curve to shift rightward.
IMPROVED TECHNOLOGY
- It is new information processing technology developments,
including new software and hardware developments and projects.

OBSOLETE TECHNOLOGY
- It refers to outdated computer hardware, software, technology,
services, or practices that are no longer used, even if they are in
working condition. A technology often becomes obsolete when
replaced by newer or better technology
4. EXPECTATION
•Anticipation on what is going to happen on the price of the commodity.

PFUTURE QS
PFUTURE QS

If there is an expectation that the market price for a certain commodity will
decrease in the future, then the present quantity supply
will rise resulting to shifting to the right of the supply curve. Conversely, if it is
anticipated that the price of the good
will increase in the future, suppliers may try to limit their supply in the market
so they can benefit of the expected
higher price. This will result to decline in the quantity supply of the good thus,
shifting the curve to the leave
5. AVAILABILITY OF RAW MATERIALS AND RESOURCES

MATERIALS AND RESOURCES QS

MATERIALS AND RESOURCES QS

6 NUMBER OF SELLER:

-The more sellers of a good, the higher is the supply

MARKET EQUILIBRIUM: Bringing demand and supply together
-A state of balance between demand and supply
- The quantity that sellers are willing to sell and the quantity that
buyers are willing to but for a price” ( Dinio et.el,2017)

- The equilibrium price is the given price is which quantity

demanded, and the quantity supplied are equal. At this price
buyers are buying all the goods they desire, sellers are selling all
the goods they desire, and there is no pressure for the market
price to change.
DETERMINATIONS OF MARKET EQUILIBRIUM

For examples, given here are the demand and supply function of
product X:
 
If we use the functions above, this will be the demand and supply
schedule which will be derived at certain prices .
EQUILIBRIUM IS ATTAINED WHEN QD=QS
 
Through computation using the functions:
Qd= 60- p\2 and Qs= 5 + 5P
 
60- P\2= 5+5P  Using P=10, substitute P in the functions:
Qd=60-P/2
60-5=5P+5\2
Qd=60(10)/2
(2)55=5P+P\2 (2) Qd=60-5
Qd=55
 
110=10P + P Qs=5+5P
110/11=11P/11 Qs=5+5(10)
  Qs=5+50
Qs=55
P=10  
 
Equilibrium price is P10 and equilibrium
quantity is 55.
 
THANK YOU!