Supply Flashcards
What does a supply curve show?
The relationship between price and quantity supplied.
What do higher prices imply? And what incentive does this create?
Higher prices imply higher profits. This will provide the incentive to expand production. This causes shifts in supply curve.
What is market supply
Market supply is the quantity of a good or service that all the firms or producers in the market plan to sell at different prices. Market supply is just the sum of the supply of all the firms or producers in the market at different market prices.
What is joint supply?
A product or process that can yield two or more outputs. Supply of one good affects supply of another good.
What is competing supply?
Using the same resources to produce.
What is composite demand?
Where goods have more than one use.
Demand of a good affects supply of another good.
E.g crops for food or biofuel
What is derived demand?
A good is needed for the production of another good.
