8 Supply Flashcards
quantity of goods and services that producer is willing and able to produce
supply
desire and producing power
supply
“nothing else changes,” everything else is constant
ceteris paribus
↑ price, ↑ supply
↓ price, ↓ supply
law of supply
directly proportional law
law of supply
law where price is the only factor
law of supply
when price increases, it becomes more profitable, so supply increases; when price decreases, it becomes less profitable, so supply decreases
law of supply
as more goods are made, price must be increased to cover the cost of production
law of supply
mathematical formula with Qs and P
supply function
table showing change in Qs and P
supply schedule
graph of Qs and P, always going up
supply curve
along supply curve, change in price
movement
of supply curve, change in non-price factors
shift
if it moves to the right, it increases; if it moves to the left, it decreases
shift
↑ price of input
↑ cost of production
↑ price of product
↓ supply
↓ demand
↓ price of input
↓ cost of production
↓ price of product
↑ supply
↑ demand
change in price of inputs (inputs/factors of production)
meant to make things better
technology (method, device, etc)
increases in amount of physical capital available relative to labor to help firms increase output
capital deepening
↓ cost
↑ profit
↑ supply
change in level of technology
future: ↑ price
now: ↓ supply
future: ↓ price
now: ↑ supply
change in expectations (of future prices)
government can tax, subsidize, or regulate production
government policies
can also encourage production of specific goods and services
government policies
↑ taxes, put limit
government policies (regulation)
↓ taxes, give subsidies
government policies (promotion)
increase or decrease in number of producers in market affects level of supply of goods and services
change in number of firms
pertains to producer’s sensitivity to changes in price on quantity willing to produce
price elasticity of supply
long run
elastic >1
short run
inelastic <1
