Supply Flashcards
1
Q
What is supply?
A
A SCHEDULE that shows AMOUNTS of a PRODUCT a PRODUCER is willing and able to PRODUCE and SELL at each specific PRICE in a SERIES of possible prices during a specified TIME PERIOD.
2
Q
Law of Supply
A
Producers will produce and sell more of their product at a high price than a low price.
There is a DIRECT relationship between price and quantity supplied.
3
Q
Explain the law of supply.
A
Given product costs, a higher price means greater profits and thus an incentive to increase quantity supplied.
4
Q
What are the determinants of supply? (6) (PETTRN) (pattern)
A
P - prices of related goods E - producer expectations T - technology T - taxes and subsidies R - resource prices N - number of sellers
5
Q
Where does the graph shift when the quantity supplied INCREASES?
A
Graph shifts to the RIGHT.
6
Q
Where does the graph shift when the quantity supplied DECREASES?
A
Graph shifts to the LEFT.
