Supply Flashcards
1
Q
What is the meaning of supply?
A
Supply refers to the amount supplied by producers at given prices over a certain period of time.
2
Q
How does price affect supply?
A
A rise in price causes an increase in the quantity supplied.
3
Q
What are factors that cause shifts in the supply curve?
A
-Costs of production
-Productivity of the workforce
-Indirect taxes-raises the costs of supply-a rise in VAT will cause the supply curve to become steeper as it is a percentage of the price of a product. Whereas a rise in a specific tax e.g. 20p per unit will cause a parallel leftward shift in the supply curve.
-Subsidies
-Technology
-Discoveries of new reserves of a raw material
