1.2.4- Supply Flashcards
What is supply?
The quantity of a good or service that producers are willing and able to supply at a given price during a given period of time
Why do costs of production shift the supply curve?
If costs fall, firms can afford to supply more and earn more profit
Why does the price of other goods shift the supply curve?
-joint supply means that production of one good automatically causes the production of another (beef and leather)
-competitive supply means production of one good prevents the supply of another (beef and milk)
Why does weather shift the supply curve?
Particularly for agricultural goods the supply is dependant on the weather
Why does technology shift the supply curve?
-advanced tech reduces costs as there is a higher productive efficiency
-during a war or natural disasters, firms may have to use less efficient technology so an inward shift
Why does gov regulation shift the supply curve?
High levels of regulation may increase costs so decrease supply
Why do exchange rates shift the supply curve?
Deprecation causes an increase in the price of imported goods
