Supply (1.2.4)

Question 1

What does Supply mean?

Answer 1

Amount of a good/service that a producer is willing and able to supply at a given price in a given time period

Question 2

What does the Supply Curve look like on a graph?

Answer 2

Slide 27

Question 3

What are the factors leading to a change in supply?

Answer 3

-Changes in the cost of production
-Introduction of new technology
-Indirect taxes
-Government subsidies
-External Shocks
-Price of other goods
-Weather
-Gov legislation

Question 4

Which way does the Supply curve slope? (Downwards or upwards?)

Answer 4

Upwards sloping

Question 5

What way will the Supply Curve shift if it increases?

Answer 5

Supply will shift to the right
Slide 28

Question 6

What way will the Supply Curve shift if it Decreases?

Answer 6

Supply will shift to the left
Slide 28

Question 7

What’s the impact on supply if an indirect tax is placed on a product?

Answer 7

Supply will be decreased and shift to the left
Slide 29

Question 8

What’s the impact on supply if a subsidy is given to a firm?

Answer 8

Supply shifts to the right as supply increases as firm has more money
Slide 29

Question 9

What does a graph look like when there is market Equilibrium?

Answer 9

The Supply is equal to the Demand. Any price above it would create excess supply and any price below it would create excess Demand.

Slide 30

Question 10

What is Price Determination?

Answer 10

Price determination is the process of how the forces of demand and supply in a market interact to determine the price of a product or service. There are different methods of price determination, such as cost-based, value-based, or competition-based. The equilibrium price is the price that balances demand and supply.(How the Product is priced due to different factors)