What are are the Determinants of Supply?/ What Causes a Shift in Supply?

Effects of Rising Costs

Input costs can have a major effect on the production and supply of goods and services.  Gas prices can limit the services of a landscaper or paper delivery person.

Technology

Increases in the ability to produce because of technological advances can shift the supply curve to the right. Breakdowns in technology can shift it to the left.

Subsidies

Government payments to firms can act as an incentive to produce more, which can affect supply. If government removes subsidies the curve will shift left.

Taxes

Government taxation towards firms can act as an incentive to produce, which can affect supply. If government removes taxes the curve will shift left, increases shift right.

Future Expectations

How suppliers view the future of the economy will affect their production of inventory today. If they think the economy is strong they will increase production today and Vice versa.

Number of Suppliers

Firms increase whenever their profit is to be made. They decrease whenever profit is reduced. Both will shift the curve to the right or the left.