2.1.4—Supply determinants

Supply is influenced by input costs, technology, taxes and subsidies, the number of firms, prices of related outputs, expectations and natural conditions, as well as the good’s own price.

A determinant that changes the amount firms are willing to sell at every price shifts supply. Lower costs or better technology usually shift supply right; higher costs shift it left.

A subsidy for solar panels lowers effective production cost and can shift their supply curve right; a rise in semiconductor prices can shift smartphone supply left.

A higher market price causes movement along supply, not necessarily a rightward supply shift.