ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Changes in the prices of inputs: The prices of the raw materials or inputs used to produce a good also cause the supply curve to shift. An increase in the prices of a good’s inputs will raise costs to suppliers and cause suppliers to supply less of that good at all prices.

Detailed explanation-2: -When there is a belief that the price of goods and services will increase in the future, the amount of supply within the economy is going to decrease. Suppliers tend to make more money when the cost of goods and services increases since they sell their products and services at a higher price.

Detailed explanation-3: -The supply of a good increases if the price of one of its substitutes in production falls. The supply a good decreases if the price of one of its substitutes in production rises.

Detailed explanation-4: -Conversely, if a firm faces higher costs of production, then it will earn lower profits at any given selling price for its products. As a result, a higher cost of production typically causes a firm to supply a smaller quantity at any given price. In this case, the supply curve shifts to the left.

Detailed explanation-5: -Which of the following factors causes a decrease in supply? O a decrease in demand • a decrease in the price of the product new taxes on output O an increase in the price of the product 45. A government subsidy to producers causes the supply curve to change slope.