Supply

Question 1

Law of supply

Answer 1

For most products the quantity supplied varies directly with its price

Question 2

Supply

Answer 2

The ability and willingness of firms to provide goods and services at each price in a given time period

Question 3

Individual supply

Answer 3

The supply of a good or service by an individual producer

Question 4

Market supply

Answer 4

The total supply of a good or service as a result of adding together all individual producers’ supplies

Question 5

Movement along the supply curve

Answer 5

When the price changes, leading to a movement up (expansion) or down (contraction) on the existing supply curve.

Question 6

Shift of the supply curve

Answer 6

The complete movement of the existing supply curve either outward (to the right) or inward (to the left)

Question 7

Elastic supply

Answer 7

When the percentage change in quantity supplied is greater than the percentage change in price.

Question 8

Inelastic supply

Answer 8

When the percentage change in quantity supplied is less than the percentage change in price

Question 9

Price elasticity of supply (PES)

Answer 9

The responsiveness of quantity supplied to a change in the price of the product