1.2.2 Supply

Question 1

Supply

Answer 1

The amount of product firms are willing and able to offer at any given price

Question 2

Factors that lead to a change in supply

CIGET

Answer 2

1) Cost of production e.g wages, raw materials , energy , rent
2) Indirect taxes
3) Government subsidies
4) External factors e.g weather , war , pandemic
5) Introduction of new technology

Question 3

How can Cost of production (COP) affect supply

and vice versa?

Answer 3

• Businesses also won’t be able to supply as much due to expensive production
• if COP is low then businesses can supply more due to less expensive production

Question 4

How does new technology impact supply

Answer 4

Introduction of new tech makes production process quicker and more efficient

• Can supply more

Question 5

How does indirect taxes affect supply

Answer 5

Taxes increase the costs of production meaning a business may supply less

Question 6

government subsides

Answer 6

a grant given by the government to individuals/business ,usually in the form of a cash payment or tax reduction, to produce a particular good

Question 7

How does government subsides affect supply

Answer 7

it reduces cost of production and increases supply

Question 8

External factors

Answer 8

Factors outside a businesses control e.g government policies , war , weather

these can impact supply

Question 9

If supply decreases where does the line shift

Answer 9

shifts to the left

Question 10

if supply increase where does the line shift

Answer 10

shifts to the right