supply

Question 1

define supply

Answer 1

is the amount of goods/services provided at a given price by producers in a market over a given time period

Question 2

Factors affecting supply:

Answer 2

• Cost of production
• New technology
• Indirect taxes
• Government subsidies
• External shocks

Question 3

what is the basic law of supply?

Answer 3

is that the price of a product rises, so businesses expand supply to the market

Question 4

cost of production: lower/higher unit costs

Answer 4

1. lower unit costs
   - businesses can supply more at each price e.g higher productivity
2. higher unit costs
   - causes an inward shift of supply e.g. increase in energy prices

Question 5

define subsides

Answer 5

a subsidy is any form of government support
- financial or otherwise - offered to suppliers = help reduce costs = encourage them to increase output

Question 6

intro to new technology

Answer 6

• new tech = encourages new entrants = increases supply = makes exisiting firms more efficient