Chapter 11 Flashcards
What is Supply?
The quantity of goods that sellers are prepared to sell over a given period of time
What happens to the cost of production as output increases?
The cost of production increases because more capital is needed to output more.
What are the conditions of supply?
Something causing a shift in the supply curve e.g
cost of production + supply - ,
technology + ——–> - cost of production —–> supply+ ,
competition’s pricing + –> supply + for complimentary goods/ supply - for alternative goods,
goals of sellers, government legislation, future expectations, weather, producer cartels
What is producer surplus?
Firms receive a price > expected payment
What are producer cartels?
Where producers come together to control the market
What is PES?
The responsiveness of changes in the quantity supplied to changes in price
What determines PES?
Substitutes available, Time period ( increase in capacity),
