In addition the seller can also lose his/her customers because of the delay in. Unlike demand, supply refers to the willingness of a seller to sell the specified amount of a product within a particular price and time. 6 Supply Shifter Factors. How do these other non-price factors impact quantity demanded? For example, if a company manufactures rubber products and there is a huge uptick in the availability of natural rubber, the demand for synthetic rubber (natural rubber’s substitute) will inherently decrease. the delivery of products. Non-price supply factors are all those factors, apart from the price of the good, that influence the supply of the good. Relax your Mind From Studying and WATCH this Beautiful Sun Flower Painting. A supply curve shows how quantity supplied will change as the price rises and falls, assuming ceteris paribus, that is, no other economically relevant factors are changing. Welcome to! Required fields are marked *. This basic economic principle not only affects the price of gold, silver, and other metals, but also of virtually every good, service, and commodity available within a free marketplace. The majority of industries are a form of oligopoly with a few firms dominating the market. Non price factors affecting supply by James Ramsey - September 2, 2012 While non-price factors can vary greatly, they are an important consideration in any marketing strategy. 90 per kg and the market price is Rs. Speculation about future price can also affect the supply of a product. Certificate Redemption Support: 1.800.450.1575 Examples of nonprice factors of supply are: 1) Technology & 2) Number of competing. It is worth noting, however, that the effect over income on demand varies depending upon the product being sold. For example, a seller would supply less quantity of a product in the market, when the cost of production exceeds the market price of the product. building a new factory. ##Key Terms Term | Definition -|- **supply** | a schedule or a curve describing all the possible quantities that sellers are willing and able to produce, at all possible prices they might encounter in a particular period of time; supply is represented in a graphical model as the entire supply curve. However, the supply of these products decreases at the time of drought. 95 per kg. Demand for a product is influenced by various factors other than price. Overall, price is a factor that affects a product’s supply the most. The inputs, such as raw material man, equipment, and machines, required at the time of production are termed as factors. Government policies can have a significant impact on supply. 30 per kg in a week” is ideal to understand the concept of supply as it relates supply with price and time. Population, from a marketing standpoint, indicates the number of buyers in any given market. Email Support:, Copyright 2016 Mpell Solutions, LLC. Number of Sellers: the amount of businesses that provide a product to the market 2. Lower costs could be due to lower wages, lower raw material costs. However, the decrease in market price as compared to cost price would reduce the supply of product in the market. Share Your PPT File. Your email address will not be published. Substitute goods affect the demand of related goods when the supply increases or decreases. Because substitute goods are used one in place of another, rather than together, the demand for one will always decrease when the demand for another increases. Any factors which can affect the demand or supply of Apple iPhone 6 will influence the market . Price: Refers to the main factor that influences the supply of a product to a greater extent. Changes in population: If the population of a country increase account of immigration or through … Stock of a product refers to quantity of a product available in the market for sale within a specified point of time. The availability of factors of production. If a good or service is a necessity then, assuming the consumer has sufficient income, it is likely to be demanded irrespective of its price. If the price of a product increases, then the supply of the product also increases and vice versa. Refers to one of the important determinant of supply. • technology needed to make the good. How Production Costs Affect Supply. For example, the supply of agricultural products increases when monsoon comes on time. that these types of products have an identity that isn’t lost over time. Of the many factors that affect the spot prices of precious metals at any one time, the law of supply and demand is by far one of the most important. For example, if a seller agrees to sell 500 kgs of wheat, it cannot be considered as supply of wheat as the price and time factors are missing. When consumers expect the price of a given good to drop in the future, it is likely that the demand for said product will stall until the aforementioned drop occurs. Email Support The cost of production rises due to several factors, such as loss of fertility of land, high wage rates of labor, and increase in the prices of raw material, transport cost, and tax rate. Prices of Other Goods: As resources have alternative uses, the quantity supplied of a commodity … Even retail stations close to each other can have different traffic patterns, rent, and sources of supply that affect their prices.