What Determines the Supply in the Market?

Just like the demand curve, the supply curve too, shifts due to a change in factors other than the price of the product. So let's see what these are. 

The various determinants of supply are:

• Price
• Input prices
• Technology
• Expectations
• Number of sellers

Then you learnt that just like the demand curve, the supply curve shifts due to a change in factors other than the price of the product.

Now you know all about supply, but we also wanted to get the perspective of drivers who are the real suppliers in this case. Let's hear what they had to say. 

Now, let’s understand how you can forecast consumer demand for a product. Demand forecasting is the process by which producers predict consumer demand in order to optimise their supply decisions. This can be done using two methods:

• Survey method - The survey method involves determining the demand for a product by using surveys and questionnaires, which are given to target customers based on their location, age, and other demographic factors. This method is mostly used in the case of new product launches, where there is no historical record of demand. You will learn more about this in the module on market research.
• Statistical method - The statistical method uses statistics and algorithms to establish a relationship between demand and its factors and makes predictions based on them. These relationships are established based on historical data, and forecasts are made based on these relationships.

So, now that you have learned all about supply, in the next segment, you will learn how demand and supply come together to determine the price and quantity demanded of a good in the market.