Discuss the factors that should motivate a producer to supply more of a commodity.
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Correct Answer: Option n
Explanation:
Factors that should motivate a producer to supply more of a commodity are:
(i) Price of the commodity. The higher the price, the higher the quantity supplied
(ii) Technology: An improvement in technology which results in the reduction of .cost of production leads to an increase in the quantity of the commodity supplied
(iii) Cost of production: A decrease in the cost of production ensures that a larger quantity will be produced and supplied.
(iv) Government policy: Subsidy given to farmers, in terms of free importation of equipment will affect supply.
(v) Weather: If the weather of a particular area is favourable at a particular period, more agricultural products will be produced and their supply to the market will increase
(vi) Prices of other commodities: The supply of a commodity will be affected if the prices of other commodities rise. An increase in the price of a commodity will encourage more production of other commodities.
Factors that should motivate a producer to supply more of a commodity are:
(i) Price of the commodity. The higher the price, the higher the quantity supplied
(ii) Technology: An improvement in technology which results in the reduction of .cost of production leads to an increase in the quantity of the commodity supplied
(iii) Cost of production: A decrease in the cost of production ensures that a larger quantity will be produced and supplied.
(iv) Government policy: Subsidy given to farmers, in terms of free importation of equipment will affect supply.
(v) Weather: If the weather of a particular area is favourable at a particular period, more agricultural products will be produced and their supply to the market will increase
(vi) Prices of other commodities: The supply of a commodity will be affected if the prices of other commodities rise. An increase in the price of a commodity will encourage more production of other commodities.