Supply

Question 1

What is supply?

Answer 1

supply is the number of products that a producer or seller is willing and capable to provide to buyers

Question 2

Explain 3 reasons why supply curves are upward sloping

Answer 2

• this is down to firms aiming to maximise profits
• the costs of making goods increasing as they produce more
• the ability to use or expand their resources to make even more goods when prices stay high

Question 3

What could cause an extension in supply?

Answer 3

When a rise in the price of a commodity leads to increase in quantity supplied of a commodity

Question 4

What could cause a contraction in supply?

Answer 4

When a fall in the price of a commodity leads to decrease in quantity supplied of a commodity

Question 5

What are the conditions of supply?

Answer 5

The higher the price, the higher the quantity supplied