supply Flashcards
The quantity of the goods and services that a producer is ? to produce at a given price and at a given period of time
willing and able
CETERIS PARIBUS
“all other things held constant”
Law of supply is …. Proportional
Directly
In supply, if peice goes up supply goessss
Up
mathematical representation showing the relationship of quantity supplied (Qs) and price (P)
Supply Function
table showing the changes in Qs as the P changes
Supply Schedule
graphical representation of the supply schedule
Supply Curve
caused by change in price
MOVEMENT along the supply curve
caused by change in price
MOVEMENT along the supply curve
caused by non-price factors
SHIFT
of the supply curve
CHANGES IN SUPPLY
Moverment, shift
If the supplycurve shifts to the left there is a/n increase or decrease in supply?
Decrease
If the supplycurve shifts to the right there is a/n increase or decrease in supply?
Increase
CHANGE IN PRICE OF
INPUTS
PRICE OF INPUT up
1 COST OF PRODUCTION up
1 PRICE OF PRODUCTup
1 SUPPLY down
+ DEMAND down
“capital deepening”
increases in the amount of physical capital available relative to labor to help firms to increase output
CHANGE IN NUMBER OF FIRMS
Increase or decrease of the number of producers in the market affects the level of supply of goods and services.
For every % change in P there is a greater % change in qs
Elastic >1 long run
For every % change in P there is a lesser % change in qs
Inelastic <1 sohrt run
For every % change in P there is an equal % change in Qso
Unitary 1
price that balances the Qd and Qs
EQUILIBRIUM PRICE
number of Qd and Qs
at equilibrium price
EQUILIBRIUM QUANTITY
Market equilibrium
the consumers are able to buy all they want to buy, and producers are able to sell all they want to sel
Demand=supply
Equilibrium
Demand>supply
Shortage
Demand<supply
Surplus
Above eq point
Surplus
BELOW EQ POINT
Shortage
How to fix excess demand?
P and Qs to rise
EXCESS SUPPLY
P and qs down
DEMAND EQUILIBRIUM SHIFT TO THE RIGHT
Shortagw
To fix shortage in demand graph?
Price push up, eq and eq up
Shift to left (demand)
Surplus
Fix demand surplus
PRICE PULL DOWNWARD
Dowm EP and down EQ
Shift to right of supply
Surplus
Fix surplus (supply)
PRICE PULL DOWNWARD
Down EP and up EQ
Supply shift to the left
Shortage
Fix shortage (supply)
PRICE PUSH
UPWARD
Up EP and down EQ
Price control
PRICE CONTROL direct economic intervention by the government to regulate price, usually done for basic commodities and
energy products
The Price Act
An act providing protection to
consumers by stabilizing the prices of necessities and prime commodities and by prescribing measures against undue price increases during emergency situations and like occasions.
PRICE
CEILING
maximum price that sellers are allowed to charge
PRICE FLOOR
minimum price at which the buyers pay for commodities
PRICE FREEZE
movement or change in price is not allowed
Price Lower Than Equilibrium Price
Price Ceiling
Price Higher Than Equilibrium Price
PRICE FLOOR
