Supply Curve

Question 1

What is ‘Supply’?

Answer 1

Amount that producers are willing to offer for sale at different prices at a given period of time

Question 2

What is a ‘supply curve’?

Answer 2

It’s a line drawn on a graph which shows how much of a good sellers are willing to supply at different prices

Question 3

What is ‘per annum’?

Answer 3

for or in each year

Question 4

What is a ‘proportionate relationship’?

Answer 4

(between price and quantity supplied) when the price goes up, the quantity supplied will also go up; vice versa

Question 5

What’s a ‘shift in the supply curve’?

Answer 5

Movement to the left or right of the entire supply curve when there is any change in the conditions of supply except the price

Question 6

How does a shift in the supply curve occur?

Answer 6

A shift in the supply curve results from changes in factors other than price, such as production costs, leading to either an increase (shift right) or a decrease (shift left) in supply.

Question 7

Describe the concept of fixed supply.

Answer 7

Fixed supply occurs when sellers can’t increase supply even when prices rise, resulting in a vertical supply curve.

Question 8

Explain the motivation behind the proportionate relationship in supply

Answer 8

• Businesses are motivated by profit
• when prices rise, businesses are willing to supply more of a good to increase profits, leading to an increase in supply.