Factors influencing supply - prices of factors of production, Managerial Economics

Prices of the factors of production

As the prices of those factors of production used intensively by X producers rise, so do the firms' costs. This cause supply to fall as some firms reduce output and other, less efficient firms make losses and eventually leave the industry.  Similarly, if the price of one factor of production would rise (say, land), some firms may be tempted to move out of the production of land intensive products, like wheat, into the production of a good which is intensive in some other factor of production.

Posted Date: 11/27/2012 6:00:42 AM | Location : United States

Related Discussions:- Factors influencing supply - prices of factors of production, Assignment Help, Ask Question on Factors influencing supply - prices of factors of production, Get Answer, Expert's Help, Factors influencing supply - prices of factors of production Discussions

Write discussion on Factors influencing supply - prices of factors of production
Your posts are moderated
Related Questions
a) What do you understand by equilibrium National Income and to what extent is economic growth beneficial to an economy? b) Explain using both diagrams and mathematical tools,

What is identity economics? How does identity economics help to explain economic questions that standard economics fails to address?

Arguments against protectionism   Most of the arguments for protectionism may be met with counter arguments, but underlying the economic arguments as opposed to the social, mo

Disadvantages of a Free Economy The free market gives rise to certain inefficiencies called market failures i.e. where the market system fails to provide an optimal allocation

What is an effective need of demand 1.  An Effective Need: Effective need demands that there must be a need supported by the capacity and readiness to shell out. Henceforth there

Income and Substitution Effects of Price Change When the price of a commodity falls the consumer's equilibrium changes.  The consumer can purchase the same quantity of X and Y

The relationship between, total expenditure and price elasticity of demand has summed up in the below table: Table: Elasticity and Consumption Expenditure Elas

Suppose that the present level of income in the economy is $700 billion. It is determined that in order to decrease the unemployment rate to the desired level, it will be essential

Real Rigidities in the Labour Market   New Keynesian  theories of the labour market help in explaining  the existence of involuntary unemployment. The theories also attempt to

Open Economy None of the three economies considered so far are engaged in trade with Foreign Countries.  Such economies are often referred to as Closed Economies.  In contrast