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Published byJohan Doddy Hardja Modified over 5 years ago
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Microeconomic supply side factors that shift the supply curve
Prices of inputs/factors of production/resources: Each good or service that is produced requires resources (land/labour/capital). The supply curve will shift when the costs of these resources/inputs change.
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Microeconomic supply side factors that shift the supply curve
Productivity growth: productivity is a measure of the efficiency of production (output/inputs). An increase in productivity means that for a given quantity of resources you can now produce more. An increase in productivity will decrease the cost per unit of production.
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Microeconomic supply side factors that shift the supply curve
Technological change: new technology will generally increase the productivity of existing resources. This means that a greater volume of goods and services will be able to be produced. The use of new technology will decrease the cost per unit of production.
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Microeconomic supply side factors that shift the supply curve
Climatic conditions: most goods and services rely upon the nature for the provision of the raw materials ether directly or indirectly. Some agricultural products are heavily dependent upon climatic conditions.
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Microeconomic supply side factors that shift the supply curve
Rates of company and indirect taxes/levies on producers: higher company or indirect taxes reduce the retained profit of firms so they are likely to decrease supply.
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Microeconomic supply side factors that shift the supply curve
Level of government assistance such as tax concessions or subsidies: government assistance helps cover some of the cost of production which allows the business to increase supply.
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