Supply Flashcards
What does ‘Quantity Supplied’ refer to?
Amount of a goods sellers are willing and able to sell
This concept is fundamental in understanding market dynamics.
What is ‘Individual Supply’?
A seller’s individual supply
This refers to the supply specific to one seller rather than the entire market.
What does the ‘Law of Supply’ state?
When the price of a good increases, the quantity supplied increases; when the price decreases, the quantity supplied decreases
This law holds true under the assumption that other factors remain constant.
What is the relationship described by ‘Supply’?
The relationship between the price of a good and the quantity supplied
This relationship is essential for understanding how markets operate.
What is a ‘Supply Schedule’?
A table that shows the quantity of a good supplied at different prices
Supply schedules help visualize how supply changes with price.
What is a ‘Supply Curve’?
A graph that represents the relationship between price and quantity supplied
The supply curve typically has price on the vertical axis and quantity on the horizontal axis.
On the supply curve, where is the price plotted?
On the vertical axis
This helps in visualizing how quantity supplied changes with price.
On the supply curve, where is the quantity plotted?
On the horizontal axis
This setup allows for easy interpretation of the supply relationship.
What is Market Supply?
The sum of the supplies of all sellers for a good or service.
What is the Market Supply Curve?
The sum of individual supply curves horizontally.
Total quantity supplied of a good varies as the price of the good varies.
What are the conditions for the Market Supply Curve?
All other factors that affect how much suppliers want to sell are held constant.
What is an Increase in Supply?
Any change that increases the quantity supplied at every price.
Supply curve shifts right.
What is a Decrease in Supply?
Any change that decreases the quantity supplied at every price.
Supply curve shifts left.
What variables can shift the Supply Curve?
Input prices, Technology, Expectations about the Future, and Number of Sellers.
How are Input Prices related to Supply?
Supply is negatively related to prices of inputs.
Higher input prices lead to a decrease in supply.
What happens to supply with an advance in technology?
Decrease in supply
How do expectations about the future affect current supply?
They affect current supply by leading to expected higher prices.
What happens when the number of sellers increases?
Market supply increases.
What is equilibrium in a market?
Various forces are in balance, where quantity supplied equals quantity demanded.
What is the equilibrium price?
It balances quantity supplied and quantity demanded, also known as the market-clearing price.
What is the equilibrium quantity?
The quantity supplied and quantity demanded at the equilibrium price.
