2.6 Supply Flashcards
1
Q
What is supply?
A
The quantity a producer is willing and able to produce at a given price in a given period.
2
Q
What is a contraction in supply?
A
The fall in supply due to a fall in price.
3
Q
What is an extension of supply?
A
The increase in supply due to a rise in price.
4
Q
What does it mean when the supply curve shifts to the right?
A
It means there is an increase in supply.
5
Q
What does PES stand for?
A
Price elasticity of supply.
6
Q
What does PES measure?
A
The responsiveness of quantity supplied to a change in price.
7
Q
What factors influence PES?
A
Spare Capacity, Stocks, Production lags, substitutability of Factors of production, time period.
