5. Supply Flashcards
1
Q
What is Supply?
A
Supply is the quantity of a good or service that a producer is willing and able to supply onto the market at a given price in a given time period
2
Q
The Basic Law of Supply
A
The basic law of supply is that as the price of a product rises, so businesses expand supply to the market
3
Q
What is a movement in the supply curve?
A
A line drawn on a graph that shows how much of a product will be bought at different prices
4
Q
What is a shift of the supply curve?
A
The supply curve shifts when the quantity of a product or service supplied at each price level changes
5
Q
How is the slope of the supply curve?
A
It has a positive slope (as price increases, quantity increases)
6
Q
Factors leading to a change in supply
A
- Cost of production
- Introduction of new technology
- Indirect taxes
- Government subsidies
- External shocks
