2.4 Supply Flashcards
1
Q
What is supply?
A
Quantity of a product firms are willing and able to sell at a given price
2
Q
Basic law of supply?
A
Positive relationship with price - as price increases, supply increases
3
Q
Why is the supply curve upward sloping?
A
1) Profit Motive
2) Law of Diminishing Marginal Returns
3) New entrants to the market
4
Q
Conditions of supply?
A
PINTS WC
1) Productivity
2) Indirect taxes
3) New entrants
4) Time lag
5) Subsidies
6) Weather
7) Costs of production
