1. Changes in Supply Supply, like demand, is affected by factors other than price. – These non price factors are called determinants of supply and can shift the entire supply curve of a product. The determinants of supply include – Prices of resources – Government tools – Technology – Competition – Prices of related goods – Producer expectations

2. Changes in Supply

3. The Determinants of supply Prices of Resources includes – Raw materials – Workers wages – electricity If the prices of resources increase, a business’ production costs increase and businesses decrease production to offset costs. When prices of resources fall, a business’ costs decrease and they are willing to supply more of the product in order to increase their profit

4. The Determinants of supply Government tools like taxes, subsidies, and regulations can cause a shift in supply to either the right or the left – Businesses have to pay taxes on the property they own, the materials they use and the profits they make – Higher taxes mean higher production costs and less profits – Subsidies are payments the government make to private businesses to lower the costs of production

5. The Determinants of supply Government tools like taxes, subsidies, and regulations can cause a shift in supply to either the right or the left – Government passes regulations about how companies can conduct business. Loose government regulations tend to increase supply Tighter government regulations tend to decrease supply New technology usually makes production more efficient and therefore less expensive