1.2.2 Supply Flashcards
1
Q
Supply
A
Amount of goods that producers are willing to supply Supply curve - Movement = Price factor Shift to left = Decrease in supply Shift to right = Increase in supply
2
Q
What changes supply
A
- Cost of production - e.g production costs increase - reduce supply
- Profits decline - production may be cut
- Government subsidies - payments to encourage to produce more
- Imposition of tax/ indirect taxes - increases cost for manufacturer
- External shocks - e.g poor harvest
- New technology - Improvement - greater efficiency
