Supply and Market Dynamics

The video discusses five non-price determinants of supply: cost of production, expected future prices, number of suppliers, technology, and prices of related goods. Each determinant influences the willingness of suppliers to produce goods. High production costs reduce supply, while expectations of future prices can lead to adjustments in current supply levels. The number of suppliers affects market competition and supply, and technological advancements can increase supply by improving efficiency. Lastly, the prices of related goods can shift production focus to more profitable items.

Which of the following is NOT a non-price determinant of supply?

• Cost of production

• Expected future prices

• Consumer preferences

• Number of suppliers

What happens to supply when the cost of production increases?

• Supply remains unchanged

• Supply decreases

• Supply increases

• Supply becomes unpredictable

If businesses expect higher prices in the future, what is their likely response?

• Decrease supply now

• Stop production

• Increase supply now

• Lower prices

How do expected future prices influence capital investment?

• They encourage investment in new tools and machinery

• They have no effect

• They lead to a reduction in labor costs

• They discourage any form of investment

What is the effect of having more suppliers in a market?

• No change in supply

• Increased supply

• Supply becomes erratic

• Decreased supply

What happens to supply when there is limited competition in a market?

• Supply remains constant

• Supply decreases

• Supply becomes unpredictable

• Supply increases

How does technology affect supply?

• It has no effect on supply

• It increases supply

• It makes supply unpredictable

• It decreases supply

What is the impact of outdated machinery on supply?

• Increases supply

• Decreases supply

• No impact on supply

• Makes supply unpredictable

How do prices of related goods in production affect supply?

• They can lead to a shift in production towards more profitable goods

• They always increase supply

• They have no effect

• They always decrease supply

What is a likely outcome when a farmer allocates more land to a higher profit crop?

• Increased supply of all crops

• Increased supply of other crops

• No change in supply

• Decreased supply of other crops