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  Factors cause Shift of Supply Curve - Homework Help

State the Factors which cause the Supply Curve to Shift

1. Natural Calamities

Any natural calamities like flood, earthquakes, drought etc. will reduce the supply and hence will shift supply curve in the left direction.

2. Cost of Production

Any kind of changes in the price of production as the result of any change in the cost of the factor input will shift the supply curve.

3. State of Technology

Advancement in the technology will surely reduce the cost of the production and hence will increase the output by shifting supply towards right.

4. Government Policies

Introduction of indirect taxes or the subsidies will affect the cost of production and therefore will shift the supply curve.

5. Economic and Political Stability

An economic recession or political unrest will result in suppliers being uncertain about the market demand and their business circumstances. Therefore, their supply can contract.

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