The Supple Curve Flashcards
What is supply?
The amount that producers are willing to offer for sale at different prices over a period of time
What does the supply curve show?
It shows how many goods sellers are willing to supply at a given price
What is the relationship between price and quantity supplied (supply theory)?
Proportionate relationship, meaning when price goes down, supply goes down
What causes movement of the supply curve?
Similar to demand curve, change in price (move along curve from A-B)
What causes a shift in the supply curve? (PINTSWC)
Productivity
Indirect taxes
Number of firms
Technology
Subsidies
Weather
Cost of production
What is fixed supply?
Supply will be fixed when it is impossible for sellers to increase supply even if price increases (number of seats at venue) and is a straight line
Draw a shift in supply.
What is a subsidy?
Money paid by the government to reduce cost of producing goods or providing a service
