(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?

Answer Details

a. Meaning of supply. The supply of a commodity is the quantity of that commodity which producers are willing and able to offer for sale at a given price over a given period of time. It is not merely the stock in existence, but the amount actually offered for sale at each price.

b. Factors that can change the supply of beans.

• Price of beans: a higher price encourages farmers to supply more, a lower price less.
• Cost of production: higher costs of seeds, fertiliser, labour or transport reduce supply.
• Weather and climate: good rainfall and favourable weather raise output, while drought, flood, pests or disease reduce it.
• State of technology: improved farming methods and equipment increase the quantity that can be supplied.
• Government policy: subsidies and low taxes raise supply, while heavy taxes reduce it.
• Prices of other crops: if maize becomes more profitable, farmers may switch land from beans, reducing bean supply.
• Number of farmers: more producers entering bean farming increases total supply.