1.2.2 supply

Question 1

definition of supply

Answer 1

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.

Question 2

How can supply be affected by costs of production

Answer 2

• if the cost of production increases
• profit will decrease
• fall in supply

Question 3

How can supply be affected by new technology

Answer 3

• more efficient production techniques = cost savings.
• lower cost business could increase supply.

Question 4

How can supply be affected by indirect taxes

Answer 4

• if a tax on a good or service (eg.VAT) increases
• increases cost for producer,
• likely to reduce their supply

Question 5

How can supply be affected by government subsidies

Answer 5

• money given to a business by the government
• encourage to produce more supply

Question 6

How can supply be affected by external shocks

Answer 6

• supply of certain products decrease
• while supply of more essential products for the situation increases.