1.2.2 : Supply

Question 1

What is the basis law of supply ?

Answer 1

Is that as a the price of a product rises so businesses expand supply to the market

Question 2

What does the costs of production mean?

Answer 2

Lower unit costs mean that a business can supply more at each price
Higher unit costs cause an inward shift of supply

Question 3

What is a subsidy ?

Answer 3

Is any form of government support - financial or otherwise -offered to producers and consumers