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-Increase in cost of production
-Shortage of inputs
-Exit of firms from the industry
-Price of related products is low
-Use of poor technology
-Future expectations of decrease in price
-Unfavorable natural factors /weather
-Price of the product has reduced
(i) An increase in either costs of production or inputs such as raw material and labour will make producers to reduce production/force some producers out of market.
(ii) In availability/inadequate factors of production.
(iii) Decrease in price of a good produced jointly with commodity X.
(iv) Increase in price of a commodity that may be produced in place of commodity X.
(v) Low levels of technology applied in production of the commodity.
(vi) Increase in tax charged on commodity.
(vii) Decrease in subsidies offered by government in production of the commodity.
(viii) Future expectation that the price of the commodity will increase.
(ix) Unfavorable climatic condition such was drought and floods especially if commodity is an agricultural commodity.
sharon kalunda answered the question on September 3, 2019 at 07:44
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Date posted: September 2, 2019. Answers (1)
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Date posted: September 2, 2019. Answers (1)