Price factors for changes in supply. Abstract: Non-price factors of supply and demand
Supply, price and non-price supply factors
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Supply, price and non-price supply factors
Offer arises if an economic entity is ready to enter into a transaction for the sale of a given product. Size (volume) of supply- this is the quantity of goods that sellers are willing and able to sell on the market at each possible price. The amount (volume) of supply is determined maximum number goods prepared for sale during a given period of time under given conditions.
The proposal can be presented in the form of: tables, functions, graphics.
Table(supply scale) shows how much of a product is offered for sale at each specific price (for example, ice cream "seal" in waffle cups):
Suggestion function(supply function) - the dependence of the volume of supply on the factors determining it.
The offer function in general view can be represented as follows :
Qs = f(P, P a , P b, C, Ta (Su), Z ...)
where P is the price of a given product, P R is the price of resources; Pa, Pb - prices for other goods (mutually complementary or interchangeable in their production); Pe - manufacturers' expectations; (C) - production costs, which are determined by the impact of changes in technology, resource prices, etc.; Ta - taxes (Su - grants and subsidies); Z - natural and climatic conditions and production conditions. The supply function on price as a special case of the supply function, etc.
QS = f(P) expresses the dependence of supply volume on price, with other factors remaining constant;
Supply curve ( supply schedule) shows a positive relationship between the price of a product and the quantity of its supply.. (Fig. 10.4).
Rice. 10.4. Supply curve
With growth prices sales volume is growing, i.e. quantity (volume) of supply increases. There is a movement along the supply curve from one point (point A) to another (point B). This dependence is expressed law of supply: other things being equal, as prices rise, the volume of produced (supplied) products (goods) increases. Manufacturers (sellers) tend to produce and offer to the market more goods, the higher their price, and less, the lower their price.
This is due to the fact that with an increase in the number of products produced, as a rule, the costs of its production also increase. And in order for producers to have a desire to produce and offer more goods to the market, the price of the good must compensate for the costs, and, accordingly, must also increase. (More details about production costs and their relationship with firms’ supply will be discussed in the chapter “Production Costs”).
1. Prices for other goods.
Changes in prices for other goods will affect the volume of supply depending on the following circumstances:
a) the ability of producers to switch to the production of more profitable goods, if these goods are interchangeable during their production;
b) price changes for co-produced goods. For example, if rabbit skins become more expensive, the supply of rabbit meat will increase (the meat supply curve will shift to the right).
2. Changes in production costs.
a) prices for resources. By virtue of various reasons resource prices may rise and the company will be forced to reduce sales. For example, if energy prices increase, then the production costs of this good will also increase and producers (sellers) will be forced to reduce output (the supply curve will shift to the left).
b) production technology. The introduction of new technologies leads to lower costs. For example, implementation computer programs management of a company can significantly reduce costs and increase labor productivity.
3. Taxes and subsidies (subsidies).
Increasing taxes actually increases costs (the supply curve shifts to the left), and providing subsidies leads to the opposite process.
5. Expectations of price changes.
If producers (sellers) expect, for example, a rise in prices, then the current supply is reduced, since, having “held” the product today, in the future they will sell it at higher prices (the supply curve will shift to the left). For example, after a sharp fall in the ruble exchange rate against the dollar on August 19, 1998. many stores closed their operations for some time in anticipation of an even greater rise in prices.
6. Natural and climatic conditions. For example, frosts during the flowering period fruit trees led to a decrease in the yield of apples, apricots and other fruits (the supply curve will shift to the left).
We have reviewed individual offer and factors influencing it. Market supply can be obtained by adding up individual offers for each of the possible prices. And the more sellers there are, the more goods they will offer
Let us summarize the factors influencing supply into a single table and once again emphasize which factors cause a shift in the entire supply curve.
Table 10.2
Factors determining supply.
3. Balance, its types
Having considered demand And offer, let's bring these concepts together (Table 10.3; Fig. 10.6).
Table 10.3
Supply and demand (ice cream, thousand pieces)
Rice. 10.6 Equilibrium in the ice cream market
From Table 10.3 and Fig. 10.6 shows that when the price of ice cream is 2 rubles, the quantity of demand and the quantity of supply coincide. In the market for this product, an equilibrium situation has been reached: the amount of ice cream that sellers are willing to sell at a given price is equal to the amount of ice cream that buyers are willing to buy at a given price. As a result, there is neither a surplus nor a shortage of ice cream in the market at this price. In other words, everyone who wanted to sell the product at this price sold, and everyone who wanted to buy the product at this price bought.
For any price of ice cream exceeding 2 rubles. for 1 piece, the quantity supplied will be greater than the quantity demanded. This excess will cause competitive price cutting by sellers trying to get rid of unsold products. A price reduction will reduce the supply of ice cream and, at the same time, will stimulate buyers to consume it more, i.e. increase the quantity of demand.
Any price that is below the equilibrium price will lead to a shortage of the product, since the quantity demanded for a given product exceeds the quantity supplied at a given price. Buyers, competing with each other to obtain goods, will offer premiums and increase the price to the equilibrium level. An increase in price, in turn, will force producers to increase supply. This will happen until an equilibrium state is established.
Capacity of competitive forces offers And demand setting the price at the equilibrium level is called balancing function of prices. It is the action of the balancing function of prices that is one of the conditions for the effective functioning of a market economy.
Thus, equilibrium in the market is achieved as a result competition between sellers wishing to sell excess goods, and buyer competition who want to obtain scarce goods.
4. Elasticity of demand: by price, income, prices of other goods
The term "elasticity" is a technical term used by A. Marshall to denote the sensitivity of the reaction of one factor as a result of the influence of another factor on it.
In relation to supply and demand this definition elasticity can be formulated like this: The degree and intensity of the consumer’s (producer’s) reaction to a change in one or another factor characterizes their elasticity.
Price elasticity of demand is the ratio of the percentage change in quantity of a good to the percentage change in price. If the price changes by 1%, then the elasticity coefficient shows how much the quantity of purchased products will change. The degree of change in demand and supply under the influence of price changes is measured using the price elasticity formula:
Ed = (Q 2 -Q 1)/ Q 1: (P 2 -P 1)/ P 1
For significant price changes, due to the fact that the typical demand curve is convex to the origin, to more accurately calculate the elasticity and avoid getting different results, when calculating it depending on the choice of initial values, it is advisable to calculate the elasticity of demand for the midpoint and use arc elasticity formula
Ed^=((Q 2 –Q 1) /(Q 1 +Q 2) : 2)) / ((P 2 -P 1)/ (P 1 +P 2): 2))
Elasticity is a dimensionless quantity and therefore comparisons of consumer reactions to price changes for various goods are possible. Since the typical demand function has a negative slope, the price elasticity of demand is always negative, and since we are only interested in quantitative values, we take the absolute value of the elasticity of demand, i.e. |E d |.
Demand is considered elastic, if given a percentage change in price leads to a larger percentage change in the quantity demanded, those. Ed > 1; If a percentage change in price leads to a smaller percentage change in quantity, i.e. Ed< 1, то спрос считается inelastic. And if the argument and function change equally, takes place unit elasticity , i.e. Ed = 1.
As the extreme limits of elasticity in theory, absolute elasticity is used: Ed = ¥ and absolute inelasticity: Ed = 0 (Fig. 10.7, 10.8).
Supply is the volume and range of the array of goods on the market and ready to go on sale, the supply of which is in question. There are:
- 1) an offer of a separate object or a group of related goods supplied by a separate company - an individual offer;
- 2) deliveries of the entire volume of a given product, carried out by all its sellers - the total supply of the object;
- 3) supplies of all goods entering the market - the total supply of society.
Law of supply and its illustration
Like demand, supply in economics is considered primarily depending on sales prices. This is explained by the fact that the price contains both the costs of production and sales and the income of sellers, i.e., economic incentives that encourage them to offer the relevant product. Between the selling price and the volume of supply, ceteris paribus, there is a clear direct connection: the higher the price, the more of a given product is offered, and vice versa. This direct relationship in economics is called the law of supply. This law is dictated solely by the common sense of sellers who want, subject to other constant circumstances, to receive maximum revenue from the sale of each unit of goods.
To illustrate this law, in economics supply is represented as a scale. It shows the known quantities of a good that the seller is willing and able to supply to the market at some price from a range of possible prices during a certain time, other things being equal. This scale can be depicted in the form of a table. 4.2, which contains hypothetical data on the volume of weekly sales of wheat of a certain variety and quality.
Table 4.2. Wheat offer by individual supplier
(hypothetical data)
The same scale can be depicted on a two-dimensional graph in the form of a supply curve (Fig. 4.3). To do this on horizontal axis, submitted table. 4.2, sales volumes of wheat are plotted in tons, and on the vertical axis are sales prices in hryvnias per ton for each sales volume. In Fig. 4.3, the GS supply curve is constructed by drawing perpendiculars from corresponding pairs of points on the horizontal and vertical axes until they intersect, and then connecting the intersection points of the curve.
As you can see, the supply curve rises from bottom left to top right. This direction of the supply curve reflects the direct relationship between the price and sales volume of the corresponding object. This curve is constructed based on the assumption that price is the most important determinant of supply. However, supply is also influenced by other circumstances, which are called non-price factors of supply.
Rice. 4.3.
Non-price supply factors
Non-price factors of supply include those circumstances that change its value, but are not related to the price of the product whose supply is in question. The impact of non-price factors on the quantity supplied, as opposed to the price of the supplied object, is illustrated not by moving along the supply curve (up to the right when the price rises, and down to the left when the price falls), but through a shift of the supply curve itself (Fig. 4.3) from PP to PP 1 in the case of increasing pressure from a non-price factor on supply, and, conversely, from PP to PP 2 in the case of a downward pressure from its non-price factors.
Non-price factors include the following:
- 1. Changes in resource prices. When prices for objects and means of labor rise, wages, rents or interest rates on loans rise, then production and sales costs increase, and, other things being equal, the income of sellers and their interest decrease. As a result, the supply of goods may decrease. The opposite is true if resource prices fall. However, much depends on the degree of change in their prices, since minor changes are unlikely to affect supply. In the 90s there was a recession in the CIS domestic production and supply was largely explained by the rapid increase in prices for fuel, energy and raw materials, transport services and public communications.
- 2. Technological shifts. Technological progress often causes a reduction in unit costs, which, other things being equal, increases the income of its sellers and stimulates supply growth. Sometimes there are incidents of technological regression that can increase costs per unit of production and, accordingly, reduce its profitability and supply. Here, of course, a lot also depends on the degree of progress or regression. By the way, in the 90s, especially in the agriculture of the CIS, due to a sharp deterioration in material and technical supplies in a number of industries (primarily livestock and vegetable growing), technological regression was observed.
- 3. Changes in taxes. Suppliers consider taxes as costs, because in their form they give part of the proceeds to the state. Therefore, if taxes are raised, the incentive to supply is reduced. A significant increase in the tax burden, as was the case in the CIS in the 90s, can reduce supply due to tax costs. On the contrary, when taxes (their types, base or rates) are reduced, additional interest arises in the growth of supply.
- 4. Change in subsidies [from lat. dotatio - gift] and subsidies [from Lat. subsidium - help]. Recipients of subsidies, if they are producers and intermediaries (for example, farmers, urban transport, etc.), consider them as taxes in reverse, i.e. taxes with a negative sign. Increasing supplier subsidies or introducing new forms of subsidies stimulates supply. And, on the contrary, with the elimination or reduction of previous subsidies (as was observed in the 90s in the CIS in relation to Agriculture, transport, communications, housing and communal services, education, health care, etc.) are limited, and sometimes even undermined, the possibility of producing and supplying in volumes that were recently economically profitable.
- 5. Change in the number of sellers. The more suppliers, the higher the supply (assuming other circumstances remain constant). And on the contrary, the fewer there are, the lower the supply. The collapse of the USSR and the introduction of customs borders between the CIS members destroyed Common Market and in the sense of a reduction in the number of suppliers, which led to a decrease in the supply of domestic products and an increase in supply from the so-called non-CIS countries.
- 6. Changes in prices for substitute products. A decrease in the prices of substitute goods increases the profitability of other goods, the prices of which have remained the same, which can increase the supply of the latter. For example, if prices for butter have fallen, then it is more profitable for sellers to supply margarine. If the prices for it have not changed, although in this case it will be more difficult to sell. On the contrary, an increase in prices for substitute goods makes it less profitable for sellers (not for buyers) to offer other goods for which prices have not risen. The effect of this non-price factor of supply is very unstable, because the price of substitute goods affects both supply and demand for other goods.
- 7. Sellers' expectations about future prices for their goods. When a supplier expects that prices for its products will rise in the future, then it either delays sales today in order to sell tomorrow, or begins to increase production capacity to strengthen its position in the market. On the contrary, if sellers expect prices for their products to fall in the future, they try to sell as much as possible today, and sometimes even try to reduce their production capacity or switch to offering other products for which prices are not expected to fall. Much depends on the reliability of expectations and the extent to which prices are expected to change in the future.
Both the selling price and non-price factors affect supply with varying intensity. The degree of their influence is recorded in the elasticity of supply.
Elasticity of supply
Elasticity of supply- this is the degree of variability in the volume of supplies of a product depending on shifts in any of the circumstances affecting the amount of its supply (from changes in price or any of the non-price factors). Elasticity is determined separately for each factor influencing the volume of supply, because their impact can not only be different in strength, but also multi-vector.
The elasticity of supply is quantitatively determined through a coefficient. The elasticity coefficient is the quotient of the percentage change in supply divided by the percentage change in the factor whose impact on supplies is being assessed. For example, if the income tax rate increased by 20%, as a result of which supply decreased by 10%, then the elasticity coefficient of supply of the corresponding product is equal to 0.5 (according to the tax burden factor).
By numerical value coefficient, there are three degrees of supply variability:
When the coefficient is greater than one, supply is considered elastic;
- 2) if the coefficient is less than one - inelastic;
- 3) equal to one - the elasticity of supply is called unit.
As when calculating the coefficient of elasticity of demand, the direction of change in the direction of decrease or increase, i.e., negative or positive values of shifts, is also not taken into account here. Only the absolute size of variability is taken into account.
The elasticity of supply may vary for different goods depending on the same factor influencing its value. This is due, first of all, to the fact that:
firstly, the degree of utilization of production capacity by various types products may not be the same, therefore, the possibility of a greater increase in supplies will be (under strong equal conditions) where the underload is more significant;
secondly, the timing of return on real capital investments in different industries varies significantly. For example, the return on investment in many light industry and service industries, not to mention trade, is noticeably faster than in most sub-sectors of mechanical engineering, metallurgy and the mining industry.
Understanding the law of supply and the mechanism of influence of non-price factors on supply volumes allows you to navigate the changes taking place in the market. True, in order to build more or less reliable forecasts based on this understanding, you need not only to have reliable information about the possible behavior of all circumstances affecting supply, but also to know how it interacts with demand.
Commodity producers are based on people's needs and produce goods and services sold on the market. Consequently, the totality of commodity producers provides people with satisfaction of their effective demand, that is, it creates supply. Offer- the desire and ability of producers (sellers) to provide goods for sale on the market at every possible price in every this moment time. The ability to provide goods is associated with the use of limited resources, so this ability is not so great as to satisfy all the needs of all people, because the total needs, as we know, are unlimited.
The volume of supply depends on the volume of production, but these two quantities do not always coincide. The amount of supply is not identical to the volume of produced products, since usually part of the produced products is consumed within the enterprise (domestic consumption) and is not provided to the market. On the other hand, there are various losses during transportation and storage of goods (for example, natural loss).
The quantity of a product that a firm wants to produce is influenced by many factors, the main ones being the following: the price of the product itself; the price of resources used in the production of a given good; level of technology; company goals; the amount of taxes and subsidies; Manufacturers' expectations. Thus, supply is a function of many variables, but we are, first of all, interested in the nature of the relationship between the amount of supply and the price of the product, with other factors that can influence supply remaining constant.
There is a positive (direct) relationship between the price and quantity of goods supplied: ceteris paribus, with an increase in price, the quantity supplied also increases, and vice versa, a decrease in price is accompanied, ceteris paribus, by a reduction in supply. This specific connection is called law of supply.
The operation of the law of supply can be illustrated using a supply graph.
A graphical expression of the relationship between the price of a product and the quantity of that product that producers want to offer on the market. The supply curve is upward sloping due to the law of supply.
Just as in the case of demand, a distinction is made between individual and market supply. Individual offer- offer from a separate manufacturer. Market supply- a set of individual offers for a given product. The market supply is found purely arithmetically, as the sum of offers of a given product by different producers at each possible price. The market supply schedule is determined by horizontally summing the individual supply schedules.
Non-price factors of supply.
The supply curve is constructed on the assumption that all factors except market price remain constant. It was already indicated above that in addition to price, many other factors influence the supply volume. They are called non-price. Under the influence of a change in one of them, the quantities supplied change at each price. In this case, they say that there is a change in supply. This manifests itself in the shifting of the supply curve to the right or left.
When supply expands, the curve S 0 shifts to the right and occupies position S 1; if supply narrows, the supply curve shifts to the left to position S 2.
Among the main factors that can change supply and shift the S curve to the right or left are the following (these factors are called non-price determinants of supply):
1. Prices of resources used in the production of goods. The more an entrepreneur must pay for labor, land, raw materials, energy, etc., the lower his profit and the less his desire to offer this product for sale. This means that with an increase in prices for the used factors of production, the supply of goods decreases, and a decrease in prices for resources, on the contrary, stimulates an increase in the quantity of goods supplied at each price, and supply increases.
2. Level of technology. Any technological improvement, as a rule, leads to a reduction in resource costs (reduction in production costs) and is therefore accompanied by an expansion in the supply of goods.
3. Goals of the company. The main goal of any company is to maximize profits. However, firms may often pursue other goals, which affects supply. For example, a firm's desire to produce a product without pollution environment may lead to a decrease in the quantity supplied at each possible price.
4. Taxes and subsidies. Taxes affect the expenses of entrepreneurs. An increase in taxes means for a company an increase in production costs, and this, as a rule, causes a reduction in supply; Reducing the tax burden usually has reverse effect. Subsidies lead to lower production costs, so increasing business subsidies will certainly stimulate expansion of production, and the supply curve will shift to the right.
5. Prices for other goods can also affect the supply of a given good. For example, a sharp increase in oil prices can lead to an increase in the supply of coal.
6. Manufacturers' expectations. Thus, producers' expectations of a possible price increase (inflationary expectations) have an ambiguous effect on the supply of goods. Supply is closely related to investments, and the latter react sensitively and, most importantly, difficult to predict, to market conditions. However, in mature market economy The expected rise in prices for many goods causes a revival in supply. Inflation in a crisis usually causes a decrease in production and a reduction in supply.
7. Number of producers (degree of market monopolization). The more firms produce a given product, the higher the supply of this product on the market. And vice versa.
Just as in the case of the impact of price and non-price factors on demand, a change in supply is distinguished from a change in the quantity of supply:
A change in non-price factors leads to a shift in the supply schedule itself to the right or left, since in this case producers offer the market a different (more or less) quantity of a given product at each price. Such changes in supply can only occur if non-price determinants of supply change. Here we are talking about change in offer;
Whenever, as a result of some changes in the market situation, the quantity supplied changes, and all the factors influencing it, except the price of product X, remain unchanged, the supply curve for the product remains in the same place, and a movement occurs along the supply curve. In such cases, other things being equal, the quantity of product X offered for sale by producers changes. Here we are talking about change in supply.
Non-price factors offers
1) The amount of costs (expenses) of production of goods. The higher the costs, the lower the quantity supplied. In turn, the level of production costs depends on:
The nature of the technology used;
The cost of resources used in this production.
2) Taxes and subsidies. Tax cuts and subsidies reduce production costs and increase supply. Increasing taxes reduces supply.
3) The number of sellers in the market. An increase in the number of sellers (manufacturers) of a given product leads to an increase in the volume of supply.
4) Prices of other goods. A change in the price of one substitute good entails a change in the supply of another good in the same direction. A change in the price of one complementary good causes an opposite change in the quantity supplied of the other good.
5) Expectations regarding price changes. Sellers' expectation of price increases reduces present supply, while sellers' expectation of price decreases increases current supply.
Supply change influenced non-price factors proposals leads to shifts supply curve.
If non-price factors lead to an increase in supply, the supply curve shifts down to the right. When supply decreases under the influence of non-price factors, the supply curve shifts upward to the left.
Non-price factors of supply - concept and types. Classification and features of the category “Non-price supply factors” 2017, 2018.
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The action of non-price supply factors causes changes in the supply of a given product while its price remains unchanged, which means that the producer will produce more or less of this product at each of the possible previous prices. Changes in supply show up in movement
Schedule 3-2. Change in the supply of product X (action of non-price supply factors)
supply curve Pr to the right of the curve prpr of the action of non-price factors of increasing supply and to the left of the curve Pr2 under the influence of non-price factors of decreasing supply (see chart 3-2).
A change in the supply of a product differs from a change in the quantity of supply in that in the first case these changes occur as a result of the action of non-price factors of supply at a constant price of the product, and in the second - as a result of a change in the price of this product; in the first case, the supply curve moves, and in the second, the curve takes an unchanged position and only movement along the curve itself is considered (the transition from one combination of “price - quantity of product” to another, which are on the same supply curve).
The following non-price factors of supply are distinguished: changes in prices for resources; change in production technology; changes in taxes and subsidies; changes in prices for other goods; expectations of changes in the price of goods; change in the number of producers of a product.
CHANGE OF TSH FOR RESOURCES. With rising prices for economic resources production costs of the product increase, and consequently, the profitability of its production decreases. If all other conditions remain unchanged (for example, stability of the price of a product, a fixed amount of money capital, etc.), in such a situation the manufacturer will be forced to reduce output volumes and vice versa: a decrease in the price of economic resources is a signal to the entrepreneur to increase supply, since the decrease in prices for resources at a constant price of the product provides the entrepreneur with greater profits. Consequently, with all other conditions being constant, an increase in prices for economic resources causes a decrease in the supply of goods, and a decrease in prices causes an increase.
CHANGES IN TECHNOLOGY. The emergence of new high-performance technologies leads to a reduction in production costs per unit of product, and, consequently, to an expansion of product supply, and the use of obsolete (for example, “used” equipment) leads to a decrease in its supply.
CHANGE IN taxes and subsidies. Changes in the system of taxation and subsidies also cause changes in the supply of goods. Since the manufacturer evaluates taxes as part of his production costs, which he must cover, then for him an increase in taxes means a reduction in income, with all other conditions being constant, inducing the entrepreneur to reduce the volume of production of the product. Reducing taxes is an incentive to increase the supply of a product. As for changes in subsidies for the production of goods provided by the state, their increase causes an increase in production volumes, and a decrease causes a decrease in the supply of goods.
CHANGES IN PRODUCT PRICES. Changes in the prices of other goods also have a certain impact on changes in the supply of goods. The reasons for this connection should be sought in the mobility of economic resources - in the possibility of their alternative use. In conditions when the price of another product is growing, but now remains unchanged, the manufacturer will consider it expedient, from the point of view of his own benefit - getting more profit, to switch the use of resources for the production of a product, the price of which has not changed, to the production of a product, the price of which increased. Therefore, when the price of another good rises, the supply of that good decreases. Conversely, a decrease in the price of another good, the production of which uses resources that can be used to produce this good, will signal an expansion in the supply of this good. For example, if the price of sour cream (another good) decreases, the supply of cheese (this good) will increase, since it will be more profitable for the owner of the milk to use milk for the production of cheese rather than for the production of sour cream. If the price of sour cream increases, then the owner of the milk uses it to produce more sour cream by reducing the production of cheese. Thus, changes in the supply of one good and changes in the prices of other goods occur in opposite directions.
EXPECTATIONS FOR PRODUCT PRICE CHANGES. Another non-price factor in changes in the supply of a product is the expectation of a change in its price. As a rule, when expecting an increase in the price of a product, its seller will be interested in “following” this product and will cause a reduction in its supply. Conversely, when expecting a decrease in prices for a product, the seller will strive to “get rid” of the product, as a result of which the supply of the product will increase. However, there are goods that the considered regularity does not apply. This applies, first of all, to goods that quickly deteriorate. A farmer who has grown tomatoes, predicting an increase in prices for them in the near future, will not be able to postpone their sale, since such actions could result in losses for him.
CHANGE IN THE NUMBER OF PRODUCERS. Lastly, a non-price factor of supply is a change in the number of producers of a product: with an increase in the number of producers of a given product, its supply will increase, and with a decrease in the number of producers, the supply of a product will decrease.
So, the reasons for an increase in the supply of a given product while its prices remain unchanged may be: a decrease in the prices of resources that are used to produce this product; application of highly efficient technologies; tax reduction; increase in subsidies; reduction in the price of another product; expectation of a reduction in the price of a product; increase in the number of producers of this product.
A decrease in the supply of a given product can be caused by: an increase in prices for economic resources that are used for its production; increased tax pressure; reduction of subsidies for the production of goods; rising prices for other goods; expectations of an increase in the price of a product; a decrease in the number of producers of a given product.