1.2.4 Supply Flashcards
1
Q
Supply
A
Supply shows that amount producers are prepared to supply to the market at any given price over a period of time.
It is upward sloping showing a positive relationship between price and quantity supplied.
2
Q
Price elasticity of supply
A
A measure of the sensitivity of quantity supplied to a change in price.
3
Q
What are the determinants of PES?
~STRESS
A
Spare capacity Time period Raw materials & components Ease of entry into an industry Substitution effect State of the economy
