PRICES AND PRODUCTION COSTS AS DETERMINANTS OF PRODUCT OFFERINGS: A SYSTEMATIC REVIEW IN A MICROECONOMIC PERSPECTIVE
DOI:
https://doi.org/10.58174/ijimes.v1i9.136Keywords:
Product Offering, Price, Production Cost, MicroeconomicsAbstract
Product supply is one of the central concepts in microeconomics that determines the overall market dynamics. This study aims to systematically examine the role of price and production costs as the main determinants of product supply in the theoretical framework of microeconomics. The method used is a descriptive quantitative approach based on systematic review by analyzing secondary data from various relevant empirical studies. The results of the study show that price has a positive and significant influence on product supply, in accordance with the law of supply which states that price increases will encourage producers to increase the number of goods offered. On the other hand, production costs are proven to have a negative influence on supply because increased costs reduce producers' profit margins and reduce incentives to increase production volume. In addition to these two main variables, supply is also influenced by other factors such as production technology developments, input prices, availability of natural resources, and government policies. These findings have important implications for economic policymakers in designing effective and equitable market interventions.
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