ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A change in supply can occur as a result of new technologies, such as more efficient or less expensive production processes, or a change in the number of competitors in the market. A change in supply is not to be confused with a change in the quantity supplied.

Detailed explanation-2: -Supply shifters include (1) prices of factors of production, (2) returns from alternative activities, (3) technology, (4) seller expectations, (5) natural events, and (6) the number of sellers. When these other variables change, the all-other-things-unchanged conditions behind the original supply curve no longer hold.

Detailed explanation-3: -The seven factors which affect the changes of supply are as follows: (i) Natural Conditions (ii) Technical Progress (iii) Change in Factor Prices (iv) Transport Improvements (v) Calamities (vi) Monopolies (vii) Fiscal Policy.

Detailed explanation-4: -i. Price: ii. Cost of Production: iii. Natural Conditions: iv. Technology: v. Transport Conditions: vi. Factor Prices and their Availability: vii. Government’s Policies: viii. Prices of Related Goods: