00:00:00:00 - 00:00:08:14 Unknown Just like factors affecting demand, the factors affecting supply as well. So what are the factors that affect supply? 00:00:08:17 - 00:00:33:16 Unknown What could affect the supply of milk? Since milk comes from cows? Anything that affects the cost of rearing cows should affect the supply of milk. What do cows eat? Well, that is something you could look into. Let's just call it cattle fodder. If the price of cattle fodder goes up, what would happen to the supply of milk? 00:00:33:16 - 00:00:38:06 Unknown Surely it would make it more difficult to be in the milk business. 00:00:38:08 - 00:00:48:11 Unknown At any rate, you would find it very difficult to sell the same amount of milk at the old price. You would want to charge more or less. 00:00:48:14 - 00:00:57:06 Unknown Either way. Just like the way the demand curve shifted. It seems that the supply curve has shifted to the left. 00:00:57:06 - 00:01:20:00 Unknown Similarly, anything that affects the cost of producing milk will shift the supply curve either left or right, depending on whether the cost has gone up or down. The list could include cost of employees, cost of infrastructure, cost of communication, cost of transport, and so on and on. 00:01:20:00 - 00:01:21:07 Unknown The list is long. 00:01:21:07 - 00:01:35:02 Unknown Why don't you think about all the costs of producing milk and how they would affect the supply? We can club all of these together and call it prices of inputs. 00:01:35:02 - 00:01:50:24 Unknown The other important factor is, of course, technology. What is technology? Well, it's the process by which you take inputs like steel, car parts, employees and fabric and turn it into a car. 00:01:50:24 - 00:02:06:22 Unknown The importance of technology is very apparent in the case of products. Obviously, steel has to be produced in a factory using some technology, such as a blast furnace, using raw materials such as I know. 00:02:06:24 - 00:02:13:10 Unknown Better technology will allow you to produce more steel with the same amount of raw materials. 00:02:13:10 - 00:02:18:04 Unknown technology is also important in the case of services. The 00:02:18:04 - 00:02:29:10 Unknown spread of the internet has now allowed education, health and banking services to be delivered online. So larger amounts of these services are now available. 00:02:29:10 - 00:02:33:11 Unknown What is the effect of better technology on the supply curve? 00:02:33:11 - 00:02:39:16 Unknown By now you should be able to say that it would shift outwards to the right 00:02:39:16 - 00:02:42:15 Unknown at the same price. More should be available. 00:02:42:15 - 00:02:58:12 Unknown We should be careful not to restrict the term technology to technical innovations alone. For instance, a new way of organizing the workforce could increase productivity and have the same effect. 00:02:58:14 - 00:03:03:06 Unknown Innovations in marketing such as online sales are another example. 00:03:03:20 - 00:03:24:08 Unknown Just as in demand, there are a few other factors that affect supply. Certainly, the weather is very important for agricultural products. Favorable monsoons will shift the supply curve to the right. Since most investments in businesses are financed through loans, 00:03:24:10 - 00:03:34:21 Unknown The availability of credit is also a factor. That is why we get excited if the central bank reduces the interest rate.

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