1.2.4 Supply Flashcards

1
Q

What is Supply?

A

The ability and the willingness to provide a good or service at a particular price at a given moment in time

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2
Q

Describe the movement along the supply curve from A to B

A

A contraction in supply, the quantity supplied falls because of a decrease in price

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3
Q

Describe the movement along the supply curve from A to C

A

A movement from A to C is an extension in supply, the quantity supplied rises due to an increase in price

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4
Q

Describe the shift from S1 to S2

A

A shift from S1 to S2 is a decrease in supply, because fewer goods are supplied at each and every price

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5
Q

Describe the shift from S1 to S3

A

A shift from S1 to S3 is an increase in supply, as more goods are
supplied at each and every price

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6
Q

List some conditions of supply

A
  • Costs of production
  • Price of other goods
  • Weather
  • Technology
  • Goals of the supplier
  • Government legislation
  • Taxes and Subsidies
  • Producer Cartels
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7
Q

What causes a shift in the supply curve?

A

A change in any of the factors which affect supply

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8
Q

What factors cause a shift in the supply curve?

A
  • Profit motivation (when price falls, it becomes less profitable to supply the product, so firms reduce output)
  • Costs of production (increase in production requires move investment in resources)
  • Technology (leads to a fall in production costs and higher productive efficiency)
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