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supply of products or services - Coggle Diagram
supply of products or services
changes in the cost of production
if the cost of production increases due to:
due to rise in raw materials
rise in minimum wage
rise in overheads
rise in rent or mortgage rates on premises
then the amount of supply decreases and therefore overall profits will decrease
businesses will switch to the production of more profitable products
availabilty of resources affect supply because if there is a shortage in some resources it will decrease supply and/or slow it down
introduction of new technology
new technology means more goods will be supplied
Mechanisation and automation of production processes means supply can increase
Mass production methods improved to increase capacity
indirect taxes
when the government increase taxes on products such as petrol then supply will decrease
VAT/Customer taxes/Excise tax are all examples of indirect taxes that makes supplying goods less attractive meaning supply will decrease
government subsidies
payment from the government to encourage businesses to enter the market and to supply more
with this subsidy you increase supply
if taxes are higher supply will decrease due to costs
external shocks
changes in oil prices
changes in tax rate
changes in labour laws
For example if the cost of oil increases this increases cost of production, and may lead to job losses or cost cutting, and will result in a decrease in supply
weather
supply in agriculture products can affect supply
governments
policies can impact supply
world shocks
global events such as war can ahve an effect on supply because if the country you get your resources from is at war it will because a slower process and therefore supply will decrease
the quantity of a product or service the producer is willing and able to make available to a market, at a given price over a certain period of time