1.2.4 Supply ✅

Question 1

What is supply?

Answer 1

The amount of goods/services a producer is willing to supply at a given price.

Question 2

What does the supply line show (what direction is it facing)?

Answer 2

A positive relationship between price and quantity.

Question 3

What will cause an contraction or extension along the supply curve (movement along)?

Answer 3

Change in price.

Question 4

What is rising marginal cost?

Answer 4

Change in total cost from making extra units.

Question 5

What are the conditions of supply and what do they do?

Answer 5

• cost of production (raw material prices increase).
• indirect tax (cost of production increases).
• subsidies (cost of production decreases).
• new technology (increases productivity and lowers cost of production).
• number of suppliers changes (if there are more suppliers then there is more supply).