2.3 - Supply Flashcards
What is Supply?
The quantity of a good or service that producers are willing and able to produce at a given price in a given period of time.
What is Joint Supply?
Where a firm produces more than one good or service together.
What is Composite Supply?
Where a product produced by a firm serves more than one market.
What is Competitive Supply?
A situation in which a firm can use its factors of production to produce alternative products.
What is individual supply?
The supply that a producer is willing and able to sell at a given
price in a given period of time.
What is market supply?
The sum of all individual supplies in a market.
Why are supply curves upwards sloping?
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, because it seems
profitable, so supply increases. With larger outputs, firm’s costs increase, so they need to charge a higher
price to cover the costs
Only what can cause movements along a supply curve?
Only changes in price will cause these movements
along the supply curve.
What stays the same when the supply curve shifts?
The price.
What is the mnemonic to remember factors that shift the supply curve?
PINTSWC
What does the P stand for in PINTSWC?
Productivity. Higher productivity causes an outward shift in supply,
because average costs for the firm fall.
What does the I stand for in PINTSWC?
Indirect taxes. Inward shift in supply.
What does the N stand for in PINTSWC?
Number of firms. The more firms there are, the larger the supply.
What does the T stand for in PINTSWC?
Technology. More advanced the technology causes an outward shift in
supply.
What does the S stand for in PINTSWC?
Subsidies. Subsidies cause an outward shift in supply.
