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=Determinants of Supply =
 * 1) Resource prices
 * 2) Technology
 * 3) Taxes and subsidies
 * 4) Prices of other goods
 * 5) Producer expectations
 * 6) Number of sellers in the market

Resource prices:
 * Help determine the costs of production incurred by firms.
 * Higher resource prices raise production costs, which in turn lower profits and lower the incentives to increase supply.
 * For example, as the price of peanuts increase, the cost of making peanut butter will increase. Therefore, as a result there will be a reduction in the supply of peanut butter.

Technology:
 * Improvements in technology improve the ways of production by allowing firms to produce outputs using fewer resources. Using fewer resources reduces production costs which increases supply.
 * An advance in technology makes it possible to supply more of a good
 * A decline in technology means producers will supply less of a good.
 * For example, when the cotton gin was invented it lowered production costs by making it more efficient to separate the cotton fiber from the seeds than hand picking it. This resulted in an increase in the supply of cotton to be used for clothing purposes.

<span style="font-family: Georgia,serif;">Taxes and Subsidies:
 * <span style="font-family: Georgia,serif;">If the government places a tax on the production of a product supply decreases.
 * <span style="font-family: Georgia,serif;">If the government subsidizes the production of a product supply increases.
 * <span style="font-family: Georgia,serif;">For example, if the government were to place a tax on steel, the production price of cars would increase. Therefore, the supply of cars would decrease.

<span style="font-family: Georgia,serif;">Prices of other goods:
 * <span style="font-family: Georgia,serif;">Firms use resources to produce alternative goods.
 * <span style="font-family: Georgia,serif;">For example, higher prices of "other goods" such as carrots and cucumbers cause firms to produce more of these goods to increase profits. This would result in a decline in the production of goods such as celery.

<span style="font-family: Georgia,serif;">Producer expectations:
 * <span style="font-family: Georgia,serif;">Changes in expectations about future prices of a product firms produce affect the sellers willingness to produce a certain product.
 * <span style="font-family: Georgia,serif;">For example, farmers anticipating a higher corn price in the future might with hold some of their current corn harvest from the market in order to have a greater profit later in time.

<span style="font-family: Georgia,serif; line-height: normal;">These five supply determinants cause the supply curve to shift
<span style="font-family: Georgia,serif;">The supply determinants are assumed to remain constant with the construction of this supply curve. The supply determinants are assumed constant for two reasons:


 * <span style="font-family: Georgia,serif;">To isolate the law of supply relation between supply price and quantity supplied.
 * <span style="font-family: Georgia,serif;">To systematically analyze what happens to supply when each determinant changes.

<span style="font-family: Georgia,serif; line-height: normal;">A change in any of the five determinants can cause either an increase in supply or a decrease in supply

 * <span style="font-family: Georgia,serif; line-height: normal;">Increase in Supply: An increase in supply is a rightward shift of the supply curve. An increase in supply means that for any price, for every price, sellers are willing and able to sell more of the good.




 * <span style="font-family: Georgia,serif; line-height: normal;">Decrease in Supply: A decrease in supply is a leftward shift of the supply curve. A decrease in supply means that for any price, for every price, sellers are willing and able to sell less of the good.

=<span style="font-family: Georgia,serif;">Supply in the news: = <span style="font-family: Georgia,serif;">In Scotland, recently there has been a significant drop in the supply of affordable home in the private sector. However, the public sector has supplied a greater number of affordable homes recently. There is major concern for the for the future of affordable housing in Scotland because the cuts in government funding on affordable housing (Producer Expectations), there is an expectation to be a shortage of housing in the near future. <span style="font-family: Georgia,serif;">[|"Fall in Supply of New Houses in Scotland"] <span style="font-family: Georgia,serif;">On the other hand, in the United States government granted subsidies that have lowered the production costs of different farm products: soybeans, cotton, wheat and corn. The lowered production costs make it less expensive for farms to expand and produce more of these products. As a result, the supply of these products will increase. <span style="font-family: Georgia,serif; font-size: 14px; line-height: 18px;">[|"Down on the Farm"]

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