11) Supply Flashcards
What is supply?
The quantity of goods sellers are willing to sell at any given price over any given time period
What factors would cause an entire S-curve to shift?
1) Costs of production
2) Indirect taxes
3) Subsidies
4) Technology
5) The prices of other goods
What is producer surplus?
The difference between the market price and the price a producer was willing to supply the good for
What is PES?
Price elasticity of supply is the responsiveness of supply to a change in the price of a good
What is the formula for PES?
Percentage change in quantity supplied / Percentage change in price
Which factors determine PES?
1) Level of spare capacity
2) Ease/cost of factor mobility
3) Stocks/ability to store output
4) Time
What is the SR?
The period of time when at least one of the factors of production is fixed
What is the LR?
The period of time when all factors of production are variable