4.1.3.3- Supply Flashcards
Define supply
The quantity of a good or service that producers are willing and able to supply at any possible price in a given period
Define the law of supply
Ceteris paribus there is a positive relationship between the quantity supplied and the price of a good or service
How to work out profit
Profit = revenue - cost
How to work out revenue
Revenue = price x quantity sold
List the factors that’s cause a shift in the supply curve
- PINTS WC -
Productivity
Indirect taxes
Number of firms
Technology
Subsidies
Weather
Costs of production
How does indirect tax cause a shift
Tax is put onto the good or service meaning that the government increase the cost of production.
How does technology cause a shift
Advanced technology will decrease the cost of production, increasing supply
How does weather causes shift
Can destroy supply by closing factories and destroying crops
Hoe do subsidies cause a shift
The government decrease the costs of producing goods to encourage an increase supply
How do costs of production cause a shift
If the price of wages, the raw materials, energy, machinery increase, supply will decrease as less money can go into manufacturing the products.
Define marginal cost curve
Marginal cost curve = change in total cost ‘/, the change in energy output.
What does the supply curve also show in perfect condition
The marginal cost curve is the same as the supply curve under perfect conditions
Define marginal cost
the increase in production costs generated by the production of additional product units
