2.3 Flashcards
supply
how willing and able a firm can provide goods and services at each price and at a given time
law of supply
the quantity supplied varies directly with its price
what do you need to do when drawing a diagram
LABEL JEEZ
individual supply
the supply of a good or service by an individual producer
market supply
the total supply of a good or service as a result of adding up individual producers supplies
a shift in the supply curve occurs when
the supply changes but the price of the actual good or service stays the same
subsidy
the amount of money given directly to a firm from the government to encourage productions and consumptions
causes of supply curve shift
tax, subsidy, climate, cost of production, technology
consequences of supply curve shift
price and quantity move in opposite directions
what causes movement in a supply curve
solely with its price change
consequences of movement in the supply curve
the quantity supplied moves in the same direction as the price change
what happens when there is a movement in the supply curve
there is a movement up or down the existing supply curve
what might happen if there’s a fall in price
supply curve movement contraction(down), reduce profit
price elasticity of supply
how responsive a change in quantity supplied is to the change in its price
PES=0
perfectly inelastic
