Introduction To Supply Flashcards
1
Q
What is supply?
A
When a producer supplies something, they are willing and able to sell it
2
Q
Why does quantity supplied increase at higher prices?
A
Because producers see that that they can make profit selling their goods at higher prices, so they have more incentive to supply when the price is higher, increasing QS.
3
Q
Why do supply curves slope upwards?
A
Because when price goes up, quantity supplied increases.
4
Q
Why would firms supply more if price increases?
A
Assume they want To maximise profit
5
Q
When is there an extension in supply?
A
When price goes up
6
Q
When is there a contraction in supply?
A
When price goes down.
