1.2.2 supply Flashcards
what is supply
supply is the quantity of a good or service that a producer is willing and able to supply onto the market at a given price in a given time period
what are producers
producers are those people that create and supply goods and services to a market
what is a supply curve
a supply curve is a graphical representation of the relationships between price and quantity
what does a supply curve show
shows the quantity supplied for a good or service, at any given price,over a period of time
- as price falls quantitu supplied decreases
- as price rises quantity supplied increases
what does a supply curve show
shows the quantity supplied for a good or service, at any given price,over a period of time
- as price falls quantitu supplied decreases
- as price rises quantity supplied increases
what factors impact supply
- P roductivity
- I ndirect taxes
- N umber of firms
- T echnology
- S ubsidies
- W eather
- C ost of production
What will happen to supply if the cost of production increases
it eill become more expensive to supply the product. This leads to firms reducing output
what else helps to reduce costs of production
improvements in technology
how does new technology help
- technological progress has , meant that firms can produce in a more efficient and cost effective manner.
- improved large scale machinery allows them to spread fixed xosts over greater output makung the cost per unit produced cheaper
as technology improves firms find it profitable to supply more products
what is indirect tax
indirect taxes are thoseplacedon goods and services produced by individuals and firms
- value added tax (VAT)
- duties
what taxation?
taxation is a charged placed on individuals or firms;governments use taxation to finance their spending
what would happen if indirect tax increased
it becomes more expenskve to produce a product
–> therefore,the quantity supplied of that product will decrease
what is a subsidies
sabsidies involve finance provided by the government to encourage suppliers to produce goods and services
what is a benefit of a subsidies
subsidies will make it cheaper to produce a product
–>therefore ,the quantity supplied of that product will increase
what is a dissadvantage of a subsidies
the withdrawal of subsidies will make it more expensive to produce a product
–>therefore,the quantity supplied of that product will decrease
