(a) What is meant by the supply of a commodity? (b) What are the probable...
(a) What is meant by the supply of a commodity?
(b) What are the probable factors that can bring about changes in the supply of beans?
Explanation
(a) Supply of a commodity is the quantity.of a commodity a producer is willing to sell at a given price over a period of time. It means the total quantity that the producer brought to the market for sale. The law of supply states that "the higher the price, the higher the quantity offered for sale".
(b) Factors that affect supply are:
(i) If the cost of production increases, the producer will charge a higher price for his product to cover cost
(ii) Government policy, particularly taxation can affect the supply of a commodity. For example, a tax on farming equipment will affect supply of beans.
(iii) The supply of a commodity will be affected if the prices of other commodities rise. If the price of substitutes like maize or rice increases, the quantity produced of beans will fall.
(iv) lithe number of producers of beans increases there will be a corresponding increase in quantity supplied.
(v) Improved techniques and technologies reduce cost per unit of product and increase output or supply.
(vi) A plague of insects, flood, drought or fire will affect the supply of a commodity like beans.