Supply

Question 1

What is supply?

Answer 1

Supply refers to a willingness and financial ability of the supplier to sell the goods or services at a particular price.

Question 2

What is the law of supply?

Answer 2

The law of supply states that suppliers are willing to provide more goods or services as prices increase due to the likelihood of greater profits.

Question 3

Contraction in supply

Answer 3

A contraction in supply occurs when the quantity of a supply of a good falls due to a decrease in price.

Question 4

An expansion of supply

Answer 4

An expansion occurs when the quantity of a good supplied increases due to an increase in price.

Question 5

Factors of supply

Answer 5

Technology development, number of supplies, cost of materials, profit levels, prices of alternate products, weather, and government policies.

Question 6

Increase in supply

Answer 6

An increase in supply leads the supply curve shifting to the right.

Question 7

Decrease in supply

Answer 7

A decrease in supply leads the supply curve shifting to the left.