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Variables Affecting The Supply Curve (for UPSC CSE)
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This lesson begins with the explanation of the various variables that affect the supply curve such as the input price i.e. the price of the raw materials. He continues by explaining the relation between the profitability of the business & the price of raw material. The second variable he talks about is technology i.e used for turning inputs into the final product. The other factors that are highlighted are expectation & the number of sellers.

Ayussh Sanghi is teaching live on Unacademy Plus

Ayussh Sanghi
Passionate Educator - CSE / Other Govt Exams [Peep into my Unacademy Plus Courses & experience awesome learning.]

Unacademy user
@ayush sir.. At 4:17, u told supply curve would shift to right. i think it would shift to the left. as per the explanation, if the motivation to supply will reduce and i will produce less cake since the input price has increased from 0.8 to 0.9, then it should shift to the left.. isn't it??? can you please check once???
3 years ago
yes i thought the same
Ramesh Mulagada
3 years ago
guys.. curve should shift to left..
3 years ago
since the input price increases,it demotivates the producer to produce more goods with less profit and the curve shifts to the left,is not it?
Ayan Mukherjee
3 years ago
which video?
Rimpa Paul
6 months ago
yes it is right..
where is the contribute button?
awesome teacher ...your wonderful voice like magnet...thanks sir
Thank you so much for this wonderful course. God bless you :)

  2. ABOUT ME Passionate about Teaching >Taught at most reputed Civil Services Institutes >CA, Lawyer Follow me on: AyusshSanghi

  3. VARIABLES AFFECTING SUPPLY CURVE We understood about the shift in supply curve Through this lesson we will understand the important variables that shift the supply curve are as follows, just as we understood shift in demand curve.

  4. VARIABLES AFFECTING SUPPLY CURVE Input Prices o In order to produce the output of a Cake, bakers use various inputs: o cream, o sugar flavouring, o cake machines, the infrastructure in which the cake is made and o labour of workers to mix the ingredients and operate the machines.

  5. VARIABLES AFFECTING SUPPLY CURVE Input Prices When the price of any of these inputs increases, producing cake is less profitable, and businesses supply less cake. o And if input prices rise substantially, a firm might shut down and supply no cake at all. Thus, the supply of a good is negatively related to the price of the inputs used to make and supply the good.

  6. VARIABLES AFFECTING SUPPLY CURVE Technology Technology used for turning inputs into cake is another determinant of supply. The invention of the mechanised cake making process machine entailed a cost. o Example: Mechanisation reduced the amount of labour necessary to make cakes. By reducing firms' cost in terms of mechanisation or the advancement in technology raised the supply of cakes. Hence Technology would also affect supply.

  7. VARIABLES AFFECTING SUPPLY CURVE Expectation Amount of cakes a business supplies today may depend on its expectations of the future. o Example: During Christmas, Plum Cake is required heavily. Hence a business would expect to increase the supply due to an occassion. If a business expects the price of cake to rise in the future, it will put some of its current production into a higher price at a future date.

  8. VARIABLES AFFECTING SUPPLY CURVE Number of Sellers o Supply in the market depends on factors that influence the supply of individual sellers, such as: influence the supplyf ndividual sellers, such as: o the price of inputs used to produce the good, the technology availabl expectations. o e o All these factors we have understood so far.

  9. VARIABLES AFFECTING SUPPLY CURVE Number of Sellers In addition, the supply in a market also depends on the number of sellers. If producers of cake were to stop producing and retire from the cake business, the supply in the market would fall. Hence the number of sellers have a huge impact.