EE&FA -DETERMNENT OF SUPPLY - FINAL YEAR CS/IT - SRI SAIRAM INSTITUTE

Views:
 
Category: Education
     
 

Presentation Description

EE&FA -DETERMNENT OF SUPPLY - FINAL YEAR CS/IT - SRI SAIRAM INSTITUTE OF TECHNOLOGY - DR.K.BARANIDHARAN

Comments

Presentation Transcript

Piksel:

Dr.K.Baranidharan Present by…

Dr.K.Baranidharan:

Engineering Economics & Financial Accounting ment E e & f a 2 18 August 2013

Engineering Economics & Financial Accountingment:

DETERMINANTS OF SUPPLY

DETERMINANTS OF SUPPLY:

It is relevant to know the factors which determine supply of a product: 1.Price of the commodity 2.Cost of Production 3.State of Technology 4.Number of Firms 5.Government Policies Sri Sairam Institute of Technology 4 15.07.2013

PowerPoint Presentation:

1.Price of the commodity The most important determinant of supply is price, Supply is positively related to price of the commodity. Relation between price and quantity supplied is the basis if Law of Supply Sri Sairam Institute of Technology 5 15.07.2013

1.Price of the commodity:

2.Cost of Production Production requires the transformation of various inputs and involves cost that includes price of inputs (wages, rents, interest, price of raw materials. etc.,) The cost of production rises, say due to rise in the price of raw materials, supply will definitely be reduced. Sri Sairam Institute of Technology 6 15.07.2013

2.Cost of Production:

Example: A company manufactures cotton shirts If the price of the raw cotton rises, this will lead to rise in the cost of production and thereby a reduction in the supply of shirts, unless the suppler can transfer the increase in cost on the consumer by increasing price Sri Sairam Institute of Technology 7 15.07.2013

Example::

3.State of Technology Technology bears a positive relationship with supply. An improved technology reduces cost of production per unit of output, enhances productivity and thus increase the supply of the product. Sri Sairam Institute of Technology 8 15.07.2013

3.State of Technology:

4.Number of Firms With increase in the number of producer of a particular product, the supply of the product in the market will increase. New firms will continue to enter the market, thus increasing supply and degree of competition. Sri Sairam Institute of Technology 9 15.07.2013

4.Number of Firms:

5.Government Policies Government Policies related to taxes and subsidies on certain products also have been an effect on supply as they increase or decrease the cost. Such effects may be either negative (in case of taxes) or positive (in case of subsidies. Sri Sairam Institute of Technology 10 15.07.2013

5.Government Policies:

Dr.K.Baranidharan THANK YOU

authorStream Live Help