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Identify the NonPrice determinants of supply in the dentistry field business. (per factor) In cost of production, number of suppliers, prices of goods and services, Taxes and subsidies and technology

Identify the NonPrice determinants of supply in the dentistry field business. (per factor) In cost of production, number of suppliers, prices of goods and services, Taxes and subsidies and technology

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter4A: Problems In Applying The Linear Regression Model
Section: Chapter Questions
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Identify the NonPrice determinants of supply in the dentistry field business. (per factor) In cost of production, number of suppliers, prices of goods and services, Taxes and subsidies and technology
NonPrice Determinants of Supply 1. Cost of production • Supply is highly dependent on the cost of production. Firms can increase their output when the prices of inputs decrease. Conversely, output tends to decrease when production costs increase. Plans for 2 expansion of capacity are jeopardized by increasing costs of production. 2. Number of suppliers Supply is also dependent on the number of sellers. When new firms begin to operate, they bring in additional supply to the market, increasing the total available supply. In contrast, the withdrawal of existing firms reduces the amount of supply in the market. 3. Prices of goods and services The prices of some goods and services affect the supply of other goods and services. If a producing firm, for instance, finds that the price of its current output has gone down considerably, it may change its products to a new one. 4. Taxes and subsidies Payment for taxes is an added component of the cost 37 5 io •. Higher taxes mean higher production costs. And firms are uistuurage. to produce more goods and services. Subsidies are money given to firms by the government to help them maintain their current or designed output. The money received by firms effectively reduces their cost of production, and they are encouraged to produce more goods and services. 5. Technology • Improvements in technology make possible the production of goods and services at lower costs. When these are adapted by firms, they will be able to produce more. Summary The market is a powerful mechanism used to provide answers to the fundamental economic problem. The market consists of buyers and sellers whose actions and decisions are translated into supply and demand. Demand is highly dependent on price. The other factors affecting the demand are needs, preferences, income level, expectations about the future, prices of related commodities, the buyer's situation, and others. Supply is also highly dependent on price but is also affected by other factors like cost of production, number of suppliers, prices of related goods and services, taxes and subsidies, and technology. ::
Transcribed Image Text:NonPrice Determinants of Supply 1. Cost of production • Supply is highly dependent on the cost of production. Firms can increase their output when the prices of inputs decrease. Conversely, output tends to decrease when production costs increase. Plans for 2 expansion of capacity are jeopardized by increasing costs of production. 2. Number of suppliers Supply is also dependent on the number of sellers. When new firms begin to operate, they bring in additional supply to the market, increasing the total available supply. In contrast, the withdrawal of existing firms reduces the amount of supply in the market. 3. Prices of goods and services The prices of some goods and services affect the supply of other goods and services. If a producing firm, for instance, finds that the price of its current output has gone down considerably, it may change its products to a new one. 4. Taxes and subsidies Payment for taxes is an added component of the cost 37 5 io •. Higher taxes mean higher production costs. And firms are uistuurage. to produce more goods and services. Subsidies are money given to firms by the government to help them maintain their current or designed output. The money received by firms effectively reduces their cost of production, and they are encouraged to produce more goods and services. 5. Technology • Improvements in technology make possible the production of goods and services at lower costs. When these are adapted by firms, they will be able to produce more. Summary The market is a powerful mechanism used to provide answers to the fundamental economic problem. The market consists of buyers and sellers whose actions and decisions are translated into supply and demand. Demand is highly dependent on price. The other factors affecting the demand are needs, preferences, income level, expectations about the future, prices of related commodities, the buyer's situation, and others. Supply is also highly dependent on price but is also affected by other factors like cost of production, number of suppliers, prices of related goods and services, taxes and subsidies, and technology. ::
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