L9 - Supply Flashcards
1
Q
What is revenue?
A
Total income that a government/company receives
2
Q
What is the formula for total revenue?
A
Price x quantity sold
3
Q
What is supply?
A
Quantity of a good or service that firms are willing to sell at a given price over a certain period of time
4
Q
What is the law of supply (assuming ceteris paribus)?
A
As the price of a good increases, quantity supplied increases (and vice versa)
5
Q
What does a supply model assume?
A
Firms are motivated to produce by profit
Cost of producing a unit increases as output increases
