microeconomics for businessTU Board 2082
State the factors causing leftward shift of supply curve of an apple farm.
2Answer
The leftward shift of the supply curve of an apple farm occurs due to the following factors:
Increase in Production Costs: Higher costs of inputs such as labor, fertilizers, or irrigation reduce profitability, leading farmers to supply fewer apples at every price level.
Adverse Weather Conditions: Unfavorable weather like droughts, floods, or frost damages crops, reducing the quantity of apples available for sale.
Technological Regression: Outdated farming techniques or lack of innovation lower productivity, decreasing supply.
Government Policies: Taxes, subsidies removal, or regulations (e.g., land-use restrictions) can discourage production, shifting supply left.
Expectation of Higher Future Prices: If farmers anticipate better prices later, they may hold back supply now, reducing current market offerings.
Reduction in Number of Sellers: Fewer apple farms (due to exit of producers) decrease total market supply.
Natural Disasters: Events like pests, diseases, or soil degradation harm apple cultivation, limiting output.
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