Principles of Supply

Question 1

Law of Supply

Answer 1

Increase in Price leads to an increase in quantity supplied, everything else equal

Student Example: Increase in money offered leads to increase in students willing to participate.

Question 2

Shifting Curve

Answer 2

Shift Left or Upward means a lesser supply, Right or Down means greater supply

Question 3

What happens to the supply curve when the price of an input increases?

Answer 3

Shifts to the left, Lesser supply

Question 4

What happens to the supply curve when the price of an input falls?

Answer 4

Shifts to the right, number of units suppliers willing to sell at any price increases