Session 11 - supply Flashcards
Define supply
Supply is the amount of a good or service, that a producer is willing and able to make at a given price
influences on supply
Changes of costs of production, introduction of new technology, mechanisation, indirect taxes, government subsidies, external shocks
What does PTISC stand for
Price
Tastes
Income
Substitutes
Complementary
What does CELT stand for
Costs of production
External shocks
Legislation
Technology
what causes movements along the supply curve
If the price rises then suppliers will be willing to supply more at the higher price because they will gain more profit
Why do laws cause a shift in supply
If wearing cycle helmets was made compulsory then producers would supply more as they could make more profit now it is the law
Why does costs in production cause a shift in supply
a fall in the cost of production will mean that more is offered at the same price
Why does weather cause a shift in supply
if there is a drought in July then supplies of strawberries would be reduced as the fruit cannot grow
What does it mean to have excess demand
too much demand in relation to supply leads to shortage
What does it mean to have excess supply
supply is greater than demand – leads to surplus
What does it mean to have equilibrium
The point where supply = demand
What does it mean to have the supply curve shift left/right
Decreased supply/increased supply
