LW4 Flashcards
Price
Amount of money a buyer has to give up in order acquire something
Cost
payments to factor inputs in production
Market
Is not a place but any situation where the buyer and sellers engage in an exchange
The quantity supplied
The amount that sellers are willing and able to sell at a particular price
Law of supply
shows how price affects the producer
Supply schedule
Shows the relationship between price and the quantity supplied
The supply curve
Graphical display of the supply schedule
Market supply
the sum of all the supplies of all sellers of a particular good or service.
Market supply curve
It shows how the total quantity supplied of a good varies with the price of the goods holding constant all other factors.
A movement in supply
It is caused by change in a price
A shift in supply
It is caused by a factor affecting supply of other than a change in price
Input price
When production costs go up, supply goes down
When cost go down, supply goes up
Technology/ Productivity
When productivity goes up, supply goes up
When productivity goes down, supply goes down
Expectations
Ex.: If sellers expect the price of a good to increase they decrease current levels of supply
The number of sellers
More sellers in a market, increased supply
Fewer sellers in the market, decrease supply
