After you have worked through this section of the learning unit, you should be able to:
- explain with the aid of diagrams the impact of non-price factors such as the number of suppliers and the weather on supply
If more businesses decide to produce fried chicken pieces, the quantity supplied to the market at each price will increase and the supply curve will shift to the right. However, a decline in the number of suppliers will reduce the supply of fried chicken pieces and the supply curve will shift to the left.
Watch the following video clip about the imapct of an increase in the number of suppliers:
THE WEATHER
Weather also plays a key role in the supply of certain goods such as maize, meat and fresh produce. While a drought will cause a decline in the supply of these goods (the supply curve for the goods will shift to the left), good rains will lead to an increase in these goods (the supply curve will shift to the right).
A decrease in supply
An increase in supply
Activity
Complete the table below by indicating what happens to the supply curve.
You must indicate whether there is an upward movement along, a downward movement along, a rightward shift or a leftward shift of the supply curve.
You must also give a correct description of the effect. You must indicate whether there is a decrease in the quantity supplied, an increase in the quantity supplied, an increase in supply or a decrease in supply.
| Supply curve | Effect | ||
| Price of the good | Increase
Decrease |
||
| Cost of production | Increase
Decrease |
||
| Substitutes goods in production | Price increase
Price decrease |
||
| Technology | Improvement | ||
| Number of sellers | Increase
Decrease |
||
| Expected prices | Increase
Decrease |
| Supply curve | Effect | ||
| Price of the good | Increase
Decrease |
Upward movement along
Downward movement along |
Increase in quantity supplied
Decrease in quantity supplied |
| Cost of production | Increase
Decrease |
Shifts to the left
Shifts to the right |
Decrease in supply
Increase in supply |
| Substitutes goods in production | Price increase
Price decrease |
Shifts to the left
Shifts to the right |
Decrease in supply
Increase in supply |
| Technology | Improvement | Shifts to the right | Increase in supply |
| Number of sellers | Increase
Decrease |
Shifts to the right
Shifts to the left |
Increase in supply
Decrease in supply |
| Expected prices | Increase
Decrease |
Shifts to the left
Shifts to the right |
Decrease in supply
Increase in supply |