Think of supply as a party. The supply curve is the dance floor, and the non-price determinants are the DJ. These determinants don't care about the price (the entrance fee) but instead, they shift and move the crowd (supply) on the dance floor (the supply curve) based on their own beats. And just like a DJ changing the song can cause the crowd to surge or withdraw, the non-price determinants can make the supply curve shift left (supply decrease) or right (supply increase). Let's drop the beat and explore each of these influencers. 🎧I

Imagine you're selling hand-knitted beanies, but the price of yarn spikes. It's now more expensive to knit each beanie, so you decide to make fewer, right? This is how an increase in input costs can cause the supply curve to slide to the left, decreasing supply.

Take it to the real world! Remember when the COVID-19 pandemic disrupted global shipping? This led to an increase in the cost of shipping goods, and as a result, some producers supplied less. That's a real-life shift of the supply curve to the left!

This can be a bit of a two-step dance

• Goods in Joint Supply: Think of a sheep farm. The farmer raises sheep for meat, but also collects their wool. If the price of lamb rises, our farmer might raise more sheep, inadvertently increasing the supply of wool. The wool supply curve slides to the right
• Goods in Competitive Supply: Imagine our farmer also grows potatoes. If the carrot prices skyrocket, he might ditch potatoes for more carrots, leading to a decrease in potato supply. The potato supply curve swings to the left.

Real-world example: Consider crude oil and petrol. If crude oil prices climb, oil companies may increase oil production, leading to an increase in petrol supply as well (joint supply). However, if natural gas prices surge, some companies may switch from oil to gas extraction, decreasing the oil and hence petrol supply (competitive supply).

Let's say you're selling pizzas. If the government imposes an extra tax on each pizza sold (indirect tax), your costs go up. You'd probably supply fewer pizzas, right? But if the government decides to pay you for each pizza sold (subsidy), you'd be making pizzas like there's no tomorrow! This is how indirect taxes can shift the supply curve left, and subsidies can shift it right.

The 2010 Affordable Care Act in the U.S. included subsidies to health insurance companies to make policies more affordable, leading to an increase in the supply of insurance policies.