supply

Question 1

what is supply?

Answer 1

Total amount of a good or service available for consumption.

Question 2

what is the law of supply?

Answer 2

there is a direct relationship between price and quantity supplied. As the price of a product increase, the quantity supplied of that product will increase, ceteris paribus.

Question 3

what happens to the graph/curve when there is a change in price?

Answer 3

moves along the supply curve - only affects the quantity.

Question 4

when does the entire supply curve shift?

Answer 4

when there are changes to the 5 shifters/non-price determinants of supply. Then the quantity changes and price stays the same, that’s how the entire curve shifts.

Question 5

what are the 5 shifters of supply?

Answer 5

The cost of the factors of production
Labour costs
The price of other products, which the producer could produce instead of the existing product
The state of technology
Improvements
Natural disasters
Expectations
Producers
Consumers
Government Intervention
Indirect taxes
Subsidies

Question 6

whos perspective is the supply curve from?

Answer 6

the producers perspective.