Describe factors affecting Supply and with the aid of diagrams, give scenarios of each case.
There are many factors affecting supply and they must all be isolated and analyzed individually and under the ceteris paribus assumption; that is; all other factors remain constant. The determinants of supply can lead to contractions or expansions if supply depends on the price of the good itself, or increases and decreases if any other factor than supply.
The market price of the good/service will influence the producer’s ability and willingness to supply it. If the price of that good is too low, producers would not be able to cover costs of production and thus would not supply item. Generally, according to the law of supply, as price rises, quantity supplied rises and as price falls, quantity supplied falls. These contractions and expansions in supply are characterized by movements along the supply curve.
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Peer Reviews
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Quality of writing
This essay is well structured and has a clear introduction and conclusion. I would've liked to have seen a bit more evaluative language such as "it depends upon" or "the size of the shift is greatly affected by the size of". Other than that, this essay is strong!
Level of analysis
The analysis is strong in this essay. I particularly like how the essay shows understanding of ceteris paribus, and the need to take each factor in isolation due to the dynamic nature of the factors affecting supply. I would be careful when referring to contractions and increases of supply - in my opinion this terminology is ambiguous. Saying that a change in price will cause a movement along the curve, and any other factor causes a shift in the curve, will ensure clarity. I would've liked to have seen some awareness that an increase in raw materials will increase the costs of production, and so the supply curve will shift left. I know this essay includes a diagram, but it is key that you explain it. Clearly explaining the mechanisms and effects is the secret to getting top marks for analysis in Economics. A short sentence such as: "The increase in raw materials has caused S to shift left to S1, thus increasing the equilibrium price from P to P1 and decreasing the equilibrium price from Q to Q1".
Response to question
This essay engages with the question well, offering a strong insight into the factors determining supply. There are clear explanations, and a wide number of examples used. I know the question didn't directly ask for a discussion of elasticity, but it would've been nice to see some awareness that there are factors which affect this too.