Name some factors that can cause a shift in the supply curve...

Name: Problem 24, Chapter 3: Principles of Macroeconomics
Uploaded: 2019-07-21T18:15:57-08:00
Duration: 2 min 39 s
Channel: Tristan Wille
Description: Name some factors that can cause a shift in the supply curve in markets for goods and services.

Key Concepts

Expectations and External Factors

Producers' expectations about future market conditions, such as anticipated price changes, can influence current supply decisions. For instance, if firms expect prices to rise in the future, they might reduce current output to sell later at higher prices, thereby decreasing present supply. Additionally, external factors like natural disasters or economic shocks can suddenly disrupt production capabilities and shift the supply curve.

Government Policies

Government interventions such as taxes, subsidies, and regulations affect the cost structure for producers. Increased taxes or stricter regulations generally raise production costs and reduce supply, shifting the supply curve to the left, whereas subsidies and deregulation can lower costs and incentivize production, shifting the supply curve to the right.

Number of Suppliers

The overall market supply of a good or service is influenced by the number of producers in the market. An increase in the number of suppliers typically boosts the total amount available at various price levels, shifting the supply curve to the right, while a decrease in suppliers reduces the market’s capacity to supply, shifting the curve to the left.

Production Costs

Changes in production costs, such as variations in the prices of raw materials, wages, and energy, directly impact the ability of firms to supply goods. When production costs decrease, firms can produce more profitably, leading to an increase in supply, while an increase in production costs typically reduces the quantity supplied at each price level, shifting the supply curve inward.

Technological Advancements

Improvements in technology can enhance production efficiency by reducing time and resource usage, which lowers the overall costs of production. This efficiency enables firms to increase output, thereby shifting the supply curve to the right. Conversely, outdated technology can limit production capabilities, reducing supply.

Transcript

00:01 All right, we're doing question number 24 from chapter three.

00:04 It's asking us name some factors that can cause a shift in the supply curve in markets for goods and services.

00:10 And while we're going to name things that are going to cause a supply shift, and so what direction can supply move? well, the supply can move up or, you know, right or down or left.

00:24 You know what i'm saying by that? up, right, it's the same shift, down, left.

00:29 Same shift.

00:30 It's just, you know, phrasing.

00:32 So what are some things that can affect it or that can cause a shift? well, what are some things that can cause a shift right? you know, maybe if we're looking in the market for oil, that would be the discovery of a new oil field.

00:45 Maybe if we're looking at the market for milk, that would be, you know, some sort of new technology that allows cows to live longer and produce more milk.

00:55 Maybe we're looking at the market for a service, like maybe, i don't know, haircuts.

01:03 And if there's a lot of immigration, more people joining the country, you're going to have more hairdressers.

01:09 So all those things are going to cause supply shifts.

01:13 And so that might be technology, discovery, you know, discovery of whatever, like a new oil field.

01:24 Immigration.

01:28 Cool.

01:30 And this are all going to be shifts.

01:35 Now for shifts down.

01:38 Well, the opposite of that...