Lecture 4: Supply of Port Services Flashcards
What does Port Supply refer to?
Total capacity, infrastructure and services a port can provide to facilitate maritime trade & operations
Includes physical infrastructure, storage facilities, services, connectivity, and policies.
Name three components of physical infrastructure in ports.
- Berths
- Docks
- Terminals
These are essential for loading and unloading goods.
What types of services are included in Port Supply?
- Cargo handling & logistics services
- Vessel Repair & Maintenance facilities
- Bunkering and provisioning for ships
These services support the efficient operation of maritime trade.
What is meant by port connectivity?
Road, rail and inland waterway links that connect the port to the hinterland
Connectivity is crucial for the movement of goods to and from the port.
List two determinants of Port Supply.
- Port Demand
- Physical Infrastructure and Port Capacity
These determinants influence the overall supply capabilities of a port.
How does the price of input affect port supply?
Lower labour cost increases supply
Costs associated with inputs directly impact the supply capabilities of ports.
What is Economic Profit?
Total Revenue - Total Cost
Economic profit considers both explicit and implicit costs.
What constitutes Total Revenue?
The amount received from sale of product (P X Q)
‘P’ represents price and ‘Q’ represents quantity sold.
What are the three factors to consider for port decisions?
- How much output to Supply
- Which production technology to use
- How much of each input to use
These factors guide effective decision-making in port operations.
Define short-run decisions in port management.
Decisions made when at least one factor of production is fixed
Focuses on optimizing existing resources.
What is the focus of long-run decisions in port management?
Strategic planning and long-term competitiveness
In long-run decisions, all inputs are variable.
Provide an example of a short-run decision in port operations.
- Adjusting ship docking schedules
This decision is aimed at improving immediate operational efficiency.
What does the Isoquant Curve represent?
Combinations of factor inputs that yield a given level of output in a production function
It is used in production theory to analyze input combinations.
What is an Isocost Curve?
Combinations of factor inputs that have the same cost
It is represented as a tangent line, not a curve.
Where does the optimal method of production occur?
Where the isoquant curve is tangent to the isocost curve
This point minimizes cost for a given level of output or maximizes output for a given cost.
