Topic 3 - Supply Micro

Question 1

Supply

Answer 1

The quantity of a good or service that producers are willing and able to produce at a given price in a given time period

Question 2

Why does the supply curve slope up?

Answer 2

Profit motive - If demand increases so does price so therefore increase in supply
If theres more products in production then the cost of the product will go up

Question 3

Factors that cause supply curve to shift

Answer 3

Prices of factors of production
Returns from alternative activities
Technology
Seller expectations
Natural events
Number of sellers

Question 4

How price affects supply curve

Answer 4

Higher price leads to a higher quantity supplied. Lower price leads to a lower quantity supplied

Question 5

Concept of joint supply

Answer 5

A product or process that can yield two or more outputs. For example:
Sheep - wool, milk, meat
Cow - milk and meats like beef