Supply Flashcards
1
Q
What is the relationship between supply and cost
A
Negative relationship
As costs increase supply decreases
2
Q
How does change in the cost of production affect supply
A
An increase in costs of production makes it more expensive to produce each unit so supply decreases
3
Q
How does new technology affect supply
A
Advances in technology will lead to lower costs of production and increase supply
4
Q
How does indirect tax affect supply
A
The government increases indirect taxes on businesses, which causes an increase in the costs so less supply
5
Q
How does government subsidies affect supply
A
A subsidy given by the government to businesses will reduce the costs of production and increase
