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Determinant of supply

A factor that will determine the level of supply at a given price.

Below is a list of factors that will cause the supply of a given product to change. If the costs of production change this will change the supply because it will ultimately affect the cost at which firms can produce products at and therefore their profit margins will be affected. New technology being introduced can increase the producitvity and efficiency of the production process and this can lead to an increase in supply at a given price. Goevernment taxes and subsidies can affect the overall cost of producing a good. For instance if a subsidy is granted to a firm it will encourage them to produce more as it is now cheaper to produce. Finally external factors such as the change in climate can affect the amount of goods that can be produced particuarly in the agricultural market (primary sector).


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