1.5: Supply

Question 1

Supply

Answer 1

The different quantities of a good that sellers are willing & able to sell(produce) at different prices

Question 2

Law of Supply

Answer 2

There is a direct( or positive) relationship b/tw price & quantity supplied

As price increases, the quantity producers make increases.

As prices fall the quantity producers make fall

B/c at higher prices profit seeking firms get an incentive to produce more

Question 3

5 Shifters of Supply

Answer 3

1. Price/ Availability of inputs ( resources)
2. Number of Sellers
3. Technology
4. Gov. Action: Taxes & Subsides
   Subsides: gov. payment to a business or market. Causes the supply of good to increase
5. Expectations of Future Profit

A change in price doesn’t shift the curve, only causes movement along the curve