An increase in market supply is caused by the following factors except_________

Analyze the question: It asks which factor does NOT cause an increase in market supply (a shift of the supply curve to the right). The key is knowing the difference between a change in quantity supplied and a change in supply.

Concept:

• Change in quantity supplied (extension/contraction): caused only by a change in the price of the commodity itself. It is a movement along the same supply curve.
• Change in supply (increase/decrease): caused by factors other than the commodity's own price. It shifts the whole supply curve. These factors are: • Technology • Cost of production (raw materials, wages) • Weather (for agricultural goods) • Taxes and subsidies • Number of sellers • Prices of related goods

Checking each option:

• A. Improved innovation and technology: lowers production costs and raises output, so supply increases (curve shifts right).
• B. Increase in the price of the commodity: this only causes a movement along the supply curve, an extension in quantity supplied, not an increase in supply itself.
• C. Reduction in the cost of raw materials: production becomes cheaper and more profitable, so supply increases.
• D. Favourable weather: gives higher agricultural yields, so supply increases.

Answer: The only factor that does not cause an increase in (market) supply is the commodity's own price rising, which causes an extension in quantity supplied.

Exam tip: Remember "Own price = move along; everything else = shift." Whenever WASSCE or JAMB asks about "increase in supply" and lists the commodity's own price as an option, that is usually the exception.