Non-Price Supply Factors

Movement vs. Shift in Supply

A movement along the supply curve occurs due to price changes. A shift occurs with changes in non-price factors.

Climatic Conditions-Supply Factor

Favorable conditions can enhance agricultural output, increasing supply; unfavorable conditions decrease supply.

Labor Force Participation Rate-Supply Factor

Higher participation increases labor availability, potentially boosting supply; lower rates can cause labor shortages and decrease supply.

Costs of Production-Supply Factor

Lower costs (e.g., raw materials, energy) boost supply, while higher costs decrease it.

Business Taxation-Supply Factor

Lower taxes enhance profitability, encouraging production and increasing supply; higher taxes can restrict supply.

Technological Advancement-Supply Factor

New technologies can improve production efficiency and lower costs, thus increasing supply.

Productivity Growth-Supply Factor

Increased productivity means more output per unit, lowering costs and boosting supply.

Influence on Producers

Favorable changes in non-price factors enhance producers' willingness and ability to produce, increasing supply. Unfavorable changes decrease willingness and ability to supply.

Impact on Equilibrium

An increase in supply shifts the curve right (lower equilibrium price & higher quantity); a decrease shifts it left (higher price & lower quantity).