Supply 1.2.2 Flashcards
1
Q
Definition of supply
A
Quantity of a good/service that produces are able to offer to the market as a given price at a particular time
2
Q
What is the law of supply?
A
C’eteis Paribus: there is a direct relationship between the quantity supplied and the price of a good
If a price charged for a good/service rises, there will be an extension (rise – increase in supply)
As price of a good/service falls, we see a contraction (decrease/decline/fall and supply)
3
Q
What is the supply curve?
A
Supply curve shows at any given point along the curve, the quantity of the goods/services that would be produced at a particular price
4
Q
Factors causing a shift in supply
A
- Future expectations
- External shocks
- Technology
- Taxes and subsidies
- Production costs
- Prices of other goods
