SUPPLY AND ITS DETERMINANT'S

IN BASIC WORD’S WE CAN DESCRIBE SUPPLY AS THE AVAILABILITY OF GOODS FOR SALE AT ANY GIVEN  PRICE .WHEN ASSESSMENT OF NEEDS  A OF CUSTOMER’S ARE CONCERNED, WE SEE THE DEMAND CONCEPT, BUT WHEN WE THINK FROM THE POINT OF VIEW OF A SELLER , SUPPLY IS MORE IMPORTANT.

WHAT ARE THE DETERMINANTS OF SUPPLY?

THE DETERMINANTS OF SUPPLY ARE :-

·         PRICE

     PRICE PLAYS ONE OF THE MOST IMPORTANT ROLES IN DETERMINING SUPPL FOR A PRODUCT OR SERVICE.IF A PERSON CAN PURCHASE SIMILAR PRODUCTS AT TWO DIFFERENT PRICES HE WILL ALWAYS GO FOR THE ONE WITH THE LOWER PRICED ALTERNATIVE,THIS SHOWS THAT COMPANIES NOT ONLY NEED TO MAKE THEIR PRODUCTS OF HIGHER QUALITY BUT ALSO BE COMPETITIVE AT PRICING.

NON-PRICE DETERMINANT’S

·         COST OF PRODUCTION

THE OVER ALL PRODUCTION COST PLAYS A GREAT ROLE IN SUPPLY DETERMINATION, AS THE PRODUCTION COST IS THE ELEMENT THAT HELPES US TO BE MORE COMPETITIVE BY LOWERING THE OVER COST’S.

·         PROFITABILITY OF ALTERNATE  PRODUCTS

 ALTERNATE PRODUCTS ARE DIRECT SUBSTITUTE’S TO OUR PRODUCTS , AND THEIR PROFITABILITY IS DIRECTLY LINKED WITH OUR DETIORATION.

·         SEASONALITY

 DO YOU WEAR WOOLEN CLOTHE’S IN THE SUMMER?, DO YOU CARRY AN UMBRELLA WITH OUT ANY RAIN ?, DO YOU GET MANGOES IN WINTER? , NO ISN’T IT. THIS IS BECAUSE LIKE PREFERENCES , THE GOODS PRODUCED IN ORDER TO SUPPLY ALSO CHANGES ACCORDING TO CUSTOMER NEEDS AND WANTS.

·         GOVERNMENT TAXES

IF THE GOVERNMENT KEEPS ON INCREASING TAXES.DO YOU THINK THAT THE SUPPLIER’S WILL STILL BE ABLE TO PRODUCE THE GOODS AT MINIMUM PRICES ? .THIS IS THE REASON WHY GOVERNMENT PLAY’S A GREAT ROLE IN BUDGET FORMULATION AND IN SALE.

·         NUMBER OF SELLER’S

 THE MARKET SHARE A COMPANY HAS DEPEND’S ON THE NUMBER OF OTHER SELLER’S IN THE MARKET.DEPENDING ON THIS THE SUPPLY MARKET CAN BE TERMED AS EITHER MONOPOLY, OLYGOPOLISTIC ,PERFECT COMPETITION MARKET ETC.

·        TECHNOLOGY

  ADVANCEMENT AND IMPROVEMENTS ON TECHNOLOGY FACILITATE GROWTH IN PRODUCTION AND INCREASE PROFITS.