Q. 10

How does an

Answer :

Supply represents the amount of a service or good which a supplier gives to the market. One of the factors affecting sellers’ willingness or capability of producing as well as selling a good is the price of inputs which may include labor, raw materials, land and energy. When the price of these inputs is increased, the marginal cost curve is affected upward which leads to a leftward shifting of the supply curve. This occurs because sellers tend to become less willing or capable of selling goods at the given price. Thus, an increment in the input price tends to negatively influence the firm’s supply.

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