Determinants of supply Flashcards
1
Q
Supply
A
Quantity of goods/services that firms supply to the market at a given price at a particular time
2
Q
Supply curve
A
Shows the relationship between price and quantity supplied. It is upwards sloping.
3
Q
Law of supply
A
The higher the price charged, the more quantity will be supplied
4
Q
Ceteris paribus
A
Assuming all else stays the same
5
Q
The reason for law of supply
A
Profit maximizers - higher prices lead to higher profits (ceteris paribus). This incentivises firms to expand production and increase supply, assuming costs are less than the price
6
Q
Influences to supply
A
Changes to
Cost of production
Productivity
Number of suppliers
7
Q
Joint supply
A
Change in supply of good 1 can cause a change to supply in a good that is a by-product of the first
