Supply and Elasticity Of Supply Flashcards
1
Q
What is supply
A
The willingness and ability of producers to produce a quantity of a good or service at a given price in a given time period
2
Q
Why does the supply curve slope upwards
A
-incentive of profits
-costs
3
Q
What causes a shift in the supply curve
A
-changes in the cost of production
-profitability of alternative products
-joint supply
-composite demand
-speculation
4
Q
What is price elasticity of supply
A
The responsiveness of quantity supplied to a change in price
5
Q
What is the formula for price elasticity of supply
A
% change in quantity supplied / % change in price
6
Q
What does a PES greater than one mean
A
Price inelastic
7
Q
What does a PES between one and zero mean
A
Price inelastic
8
Q
What influences price elasticity of supply
A
-flexibility
-storability
-availability
-time
