Supply Flashcards
1. define supply. 2. use a supply curve to show the difference between shifts of and movements along the supply curve. 3. describe the causes of changes in supply conditions (factors that cause the supply curve to shift)
1
Q
Define supply.
A
the amount that producers are willing to offer for sale at different prices in a given time
2
Q
What is extension in supply?
A
when the price of a good or service increases, supply increases.
3
Q
What is contraction in supply?
A
when the price of a good decreases, supply decreases/
4
Q
What factors affect supply?
A
Subsidies - money from the government fiven to firms (e.g. solar panels)
Technology - increases supply and more efficient
Indirect taxes - taxes on goods or services, decreases supply
Natural factors - decrease supply
Cost of production - wages, raw materials, rent and electricity , decreases supply if production costs rise
5
Q
What do i need to mention when explaining movements in a curve?
A
- Which curve?
- Which movement?
- Whats the impact on price?
- Whats the impact on quantity?
