3 Supply Flashcards
Define joint supply
Where a firm produces more than one product together
Composite supply
Where a product produced by a firm serves more than one market
Competitive supply
A situation in which a firm can use its factors of production to produce alternate products
What impacts supply curve
Pintwc
P productivity I indirect taxes N umber of firms T tech S subsidy Weather Cost of production
Difference between a movement along the s curve (contraction/expansion) and a shift in the s curve
Pic in album
Rise in price = expansion in supply
Fall in price = contraction in supply
Shift outwards/inwards is caused by a change in PINTSWC (outwards = fall in price, inwards=rise in price )
How changes in price affect consumer surplus
Pic
Initial
New
Rise in price = rise in producer surplus
Fall in price = fall in producer surplus
However, should supply curve shift outwards this fall could be compensated for
Disequilibrium
Define
Causes
Consequences
When quantity demanded does not equal quantity supplied
When economic forces generated change the situation: shift in demand or supply
There could be excess demand (lower triangle) or excess supply (upper triangle)
Define market equilibrium
when the price is such that the quantity that consumers wish to buy is exactly balanced by the quantity firms wish to supply
No excess supply or excess demand
Diff between individual supply and market supply
Individual supply is the supply of an individual producer at each price whereas market supply of the individual supply schedules of all producers in the industry.
Disequilibrium
Define
Causes
Consequences
When quantity demanded does not equal quantity supplied
When economic forces generated change the situation: shift in demand or supply
There could be excess demand (lower triangle) or excess supply (upper triangle)
Define market equilibrium
A situation that occurs in a market when the price is such that the quantity that consumers wish to buy is exactly balanced by the quantity firms wish to supply
No excess supply or excess demand
Diff between individual supply and market supply
Individual supply is the supply of an individual producer at each price whereas market supply of the individual supply schedules of all producers in the industry.
