Supply Flashcards
1
Q
What is the definition of supply
A
The quantity of a product that a firm is willing and able to supply to the market in a period of time
2
Q
Explain the relationship between price and supply and how is this shown on a market diagram
A
- As the price of a product increases, firms supply more because there is a greater profit incentive
- Change in price causes movement along supply curve
3
Q
Give 5 factors that cause a shift in supply
A
- Changes in prices of factors of production
- Changes in productivity
- Changes in tax and subsidies
- Weather shocks
- Changes in the number of firms in the market
