Which of the following is an example of a factor in the determination of supply?

Study for the IGCSE Economics Test. Dive into multiple choice questions and informative flashcards, each with hints and clear explanations. Boost your exam readiness!

The determination of supply in economics is influenced by various factors, one of which is the price of raw materials. When the price of raw materials increases, the cost of production for firms also rises. This can lead to a decrease in supply, as producers may not be willing or able to supply as much at the previous price levels. Conversely, if raw material prices drop, it generally lowers production costs, potentially leading to an increase in supply, as firms can produce more at lower costs.

This relationship illustrates the importance of raw materials in production processes, emphasizing their crucial role in determining the overall market supply of goods. Other factors such as consumer tastes, advertising expenses, and seasonal trends may affect demand or consumer behavior, but they do not directly impact the supply side in the same way that raw material prices do.

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