The Determinants of the Supply of Goods and Services Flashcards
What is supply?
The quantity of a good or service that all the firms or producers in the market plan to sell at different prices
What is market supply?
The sum of the supply of all the firms or producers in the market at different market prices
What is the revenue formula?
Price x Quantity
What is the profit formula?
Total Revenue - Total Costs
Is the supply curve upward sloping?
Yes
What does the supply curve show?
The relationship between price and quantity supplied
What are the determinants of supply?
The price of the good The impact of changing costs of production Technological progress Prices of other goods and services Government policy
What are the costs of production?
Wage costs
Raw material costs
Energy costs
Costs of borrowing
What are the main conditions of supply?
Technological progress
Taxes- VAT
Subsidies
What is direct tax?
Directly paid to the government e.g. income tax, corporation tax
What is indirect tax?
The manufacture of goods and services e.g. VAT
What is joint supply?
When the production of one good leads to the supply of a by product
E.g. beef and leather
What is competing supply?
When materials are used to produce one good but can’t produce another
