ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A rise in the cost of inputs of production will shift the supply curve to the left as the higher input costs correspond to a lower profit maximising quantity.

Detailed explanation-2: -These inputs are also known as factors of production. If the price of inputs goes up, the cost of producing the good increases. And therefore at each price producers need to sell their good for more money. So an increase in the price of inputs leads to a decrease in supply.

Detailed explanation-3: -A decrease in the prices of a good’s inputs reduces costs and allows suppliers to supply more of that good at all prices. Therefore, a decrease in the prices of a good’s inputs leads to a rightward shift of the supply curve for that good, as in Figure (b).

Detailed explanation-4: -The supply a good decreases if the price of one of its complements in production falls. Resource and input prices influence the cost of production. And the more it costs to produce a good, the smaller is the quantity supplied of that good. Expectations about future prices influence supply.

Detailed explanation-5: -Supply of goods and services An increase in price almost always leads to an increase in the quantity supplied of that good or service, while a decrease in price will decrease the quantity supplied.