5-Supply

Question 1

Define Supply

Answer 1

Quantity of goods producers will sell at a given price over a given time period

Question 2

Law of Supply

Answer 2

Price ↓ Demand ↓
Price ↑ Demand ↑

Question 3

What causes a Movement Along the Supply Curve?

Answer 3

Movement occurs due to changes in Price ONLY

Question 4

What causes a Shift of the Supply Curve?

Answer 4

Shift occurs due to changes in any factor other than price

Question 5

Factors that cause a Shift in the Supply Curve

Answer 5

–> Cost of production
Increase in COP = shifts supply curve to left.
–>Indirect tax
COP increases = shifts supply curve to left.
–>Subsidy
COP decreases = shifts supply curve to right.
–>Technology - New inventions and new technology
productivity increases = shifts supply curve to right.
–> Natural factors
Favorable weather = shifts supply curve to right