Answer: Â Somethings that may happen is that they will produce the product in lower amounts or that they may have to cheapen out on some materials to get passed the costs and make profit. For example a computer may need a 800 watt power supply for it to work properly but because it is too expensive, they may do something like put a 600 watt power supply in it, label it 800 watt and get some cheap parts to make sure the computer still works to accommodate the lower watt PSU.
If a firm produces the product with more expenses as compared to the sale price, then it would have a negative impact on the supply curve.
When a firm incurred higher cost of production, then it will lower the profit. It will cause the firm to supply the product in small quantity at any given price.
An increase in the price or production cost will decrease the quantity of supply and supply curve shifts to the left.
Cost of production and supply of the product have the indirect relationship with each other.
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