Non-Determinates Prices of Supply
Most people that are common shoppers have encountered a situation where the product that they were seeking to buy was not available. It is very easy to see that certain products do have an ample supply due to many reasons. Other than the price of that product, there are six major non-determinate factors of supply. These factors are: Number of Sellers, Technology, Resource Prices, Taxes and Subsides, Expectations of Producers, and Price of other goods the Firm could Produce. With these factors and the demand of the product, the supply of a product can be determined, and a price can be set. The number of sellers can be one of the most determining factors of the supply of a product. The concept is very easy to understand. If there are more sellers, that is more stores and manufactures, there will be a larger amount of supply of a certain product. On the other hand, if there are a small number of sellers then there will be little supply of the product. When considering the price of a product, if there are more sellers then there will be more competition; therefore, the price will be at a low cost for the buyers. The sellers will not make a large profit. Moreover, when there is a small amount of sellers then the price can
Producers and seller always consider how their product will be effected by non-determinate prices of supply. Each of the six factors affects how companies will produce and price its product. As buyers we have to pay what the sellers want, if there is a limited amount of the product. Or, we have the privilege to shop around and find the seller that has the product for a smaller price. Whenever you get frustrated that you cannot find the product you are looking for and it is highly price, remember that it is not always the seller who determines this price. Taxes and Subsidies are very similar to Resource Prices. If there is more tax on certain products, then most companies will not produce large quantities of the product. So, if taxes increase for certain products, then the products will have a higher price and there will not be a large amount of them. On the other hand, certain subsides from the government would cause resource prices to be lower. This would cause a lower price and a larger amount of supply. be higher for the buyers. This means the sellers will make a larger amount of profit. For example; there are more sellers for a Toyota Carmry, then there are for Dodge Vipers. The last two remaining factors have to deal with the producers alone. Expectation of producers and prices of other goods the firm could produce deal with how the producers run their company. Expectation of producers has to deal with
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Approximate Word count = 970
Approximate Pages = 4 (250 words per page double spaced)
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