2.4 Supply

Question 1

Supply

Answer 1

The amount of a good or service firms or producers are willing to produce and sell at different prices

Question 2

Law of supply

Answer 2

A direct relationship between the price of a product and the quantity supplied.

Question 3

Quantity supplied

Answer 3

The amount of a good or service firms are willing and able to make and sell to consumers in a market.

Question 4

Market supply

Answer 4

Sum of all the individual supply curves of producers competing to supply a product

Question 5

Extension in supply

Answer 5

As the price of a product rises, the quantity supplied extends

Question 6

Contraction in supply

Answer 6

As the price of a product falls, the quantity supplied contracts

Question 7

Increase in supply

Answer 7

Rightward shift of the supply curve which shows that producers are more willing and able to supply a product than they were before at every given price.

Question 8

Decrease in supply

Answer 8

Supply curve shifts leftwards showing that producers are less willing and able to supply a product than they were before at every given price.

Question 9

What are some conditions of supply

Answer 9

Changes in the cost of production - cost of factors of production.

Technological advancement

Global factors - sanctions, wars, weather (good or bad), natural disasters

GC of T

Question 10

What is excess supply and what do producers do about it

Answer 10

Surplus of supply.
To eliminate producers reduce the price of their product so that demand increases and the market equilibrium is achieved.