हिंदी
CISCEISC (Commerce) Class 12
प्रश्न पत्र३५४
पाठ्यपुस्तक उत्तर१८२१८
महत्वपूर्ण प्रश्न एवं उत्तर५६८४
अवधारणा स्पष्टीकरण और वीडियो६०५
समय सारणी१५
पाठ्यक्रम

Determinants of Supply

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Topics

  • Introduction
  • Main Determinants of Supply
  • Supply Function
  • Determinants of Elasticity of Supply
  • Importance of Elasticity of Supply
  • Real-Life Application
  • Key Point Summary
CISCE: Class 12

Introduction

Supply refers to the quantity of a commodity that producers are willing and able to offer for sale at different prices during a certain time period.

CISCE: Class 12

Main Determinants of Supply

Determinant How It Affects Supply Example
Price of Commodity Higher price usually increases supply (more profit for sellers) Smartphone prices rise, companies supply more ​
Input Prices Higher input costs reduce supply (lower profits) Expensive raw materials mean less production ​
Technology Better technology increases supply (lower costs, more output) Automation boosts car factory output ​
Number of Sellers More sellers in the market increase overall supply Entry of new firms in e-commerce increases supply ​
Government Policies Taxes reduce supply; subsidies increase supply GST reduces supply, subsidy increases it ​
Expectations of Future Prices If producers expect higher future prices, they may hold back current supply Farmers withhold crops if higher prices expected ​
Prices of Related Goods Producers may switch to producing what is more profitable A farmer grows more wheat if its price rises relative to rice ​
Natural Factors Weather, disasters, and seasons can impact especially agricultural supply Drought lowers crop supply; good rainfall increases it ​
Transport and Communication Better infrastructure increases supply area and freshness Highways let fruits reach markets faster, increasing supply ​
CISCE: Class 12

Supply Function

Where:

  • P: Price of the commodity

  • I: Input prices

  • T: Technology

  • N: Number of sellers

  • G: Government policy

  • E: Expectations

  • R: Related goods prices

  • F: Natural factors

  • Tr: Transport/communication

CISCE: Class 12

Determinants of Elasticity of Supply

Determinant Explanation
Behaviour of Cost Faster fall in cost when output increases → more elastic
Period of Time Supply is less elastic in short run and more elastic in long run
Nature of Commodity Perishable items → less elastic, durable ones → more elastic
Market Structure More elastic under competition; less under monopoly
Economic Situation Elastic during depression (input readily available)
Transport Development Better transport → higher elasticity
Technical Advancement New inventions raise supply elasticity
CISCE: Class 12

Importance of Elasticity of Supply

  • Explains price changes when demand varies.
  • Helps in economic planning and taxation.
  • Guides government policies for better market outcomes.​
CISCE: Class 12

Real-Life Application

If a new machine lets a bakery make more bread with the same amount of flour and workers, supply increases. If an important ingredient’s price rises sharply, the bakery might produce less bread.

CISCE: Class 12

Key Point Summary

  • Main determinants: price, input costs, technology, seller number, government action, expectations, related goods, nature, infrastructure.
  • Supply rises with higher prices, more sellers, advances, or subsidies.
  • Supply falls with higher input costs, higher taxes, or production troubles.

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