Question

Visit a market and write a report on the factors that influence the quantity of supply of a commodity of your locality?

Answer 1

Things that cause changes in supply are also called influences of supply.
The influences on supply are:

1. Inputs
2. Productivity
3. Technology
4. Taxes
5. Subsidises
6. Government regulation
7. Number of sellers
8. Political conflict

Supply and Demand Balance:

1. It supply is more price goes down. Demand is more price goes up.
2. Commodity movement get these number [PIS]

P = Production
I = Import
S = Stock

These three represent supply of any commodity = [E × C]
E = Export;
C = Consumption

1. These two represent demand.
2. PIS is more than E × C., then that commodity price goes down.
3. E × C is more than PIS that commodity price goes up.
4. Prediction of any commodity price, you will predict it before that supply demand imbalance.
5. That means today’s wheat or rice prices are reflection of what will happen to its supply demand in next few months rather than its current balance.
6. India’s largest commodity exchange currently working as trader in Agricultural commodities.
7. The supply is interfered with by legal or illegal cartels.
8. The price is also inflated by opportunistic government charges.
9. A price ceiling prevents a price from rising above the ceiling.
10. Wheat has a price ceiling of 2400 per metric tonne, $400 is the highest amount supplier can charge.