Chapter 3 (SUPPLY) Flashcards
1
Q
Law of Supply
A
- when prices of a product or service rises, quantity supplied increases… in order to maximize in profits
2
Q
6 Factors to Change Supply
A
Change in…
1. Technology
2. Environment
3. Price of Inputs
4. Price of Related Products
5. Expected Future Prices
6. Number of Businesses
3
Q
Equation to Change Marginal Cost
A
- change in total cost / change in quantity
Which equals… - TC1-TC0 / Q1-Q0
4
Q
Market Supply
A
Sum of quantities of all produce at each price
5
Q
Sunk Costs
A
- past, already paid expenses that cannot be recovered.
- these past expenses ARE NOT marginal opportunity costs and have no influence on smart choices
- the same no matter what choice you make
6
Q
An increase in supply is a WHAT shift
A
RIGHT SHIFT
7
Q
A decrease in supply is a WHAT shift
A
LEFT SHIFT
8
Q
How to read supply curve
A
Over and down
9
Q
How to read marginal cost curve
A
Up and over
