2.3 supply Flashcards
1
Q
why is the supply curve upwards sloping?
A
-if price increases, it is more profitable for firms to supply the good, so supply increases
-high prices encourage new firms to enter the market, so supply increases
2
Q
what are the types of supply?
A
joint- when increasing the supply of one good will increase or decrease the supply of another
composite- when a good or service can be obtained from different sources
competitive- the raw materials are perfect substitutes so sources of supply are in competition to satisfy a need or want.
3
Q
what causes a shift in supply?
A
Productivity
Indirect taxes
Number of firms
Technology
Subsidies
Weather
Costs of production
