Block Type
Knowledge Checkpoint
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- if the cost of production falls supply will increase (1)
- new technology will increase the supply of a product (1) for example, automation making it possible to increase the production of a product (1)
- good weather increases output of agricultural products (1) payment of subsidies/grants encourages firms to increase supply (1)
- if taxes are imposed on imported goods, domestic firms will be encouraged to increase supply (1)
- prices of substitute goods may encourage firms to divert resources, increasing supply of high priced goods (1)
- goods in joint supply − an increase in the supply of one will lead to increased supply of the other (1)
- if the price of the product rises producers will divert resources to increase supply (1)
- Note: The question asks what increases the supply of a product. While determinants of supply can shift the supply curve and thus increase the supply of a product, an increase in price can ALSO increase the quantity supplied due to movement along the supply curve, following the law of supply.