2.3 supply

Question 1

what is supply

Answer 1

he quantity of a good or service that producer are willing and able to supply at a given price in a given time period

Question 2

what is the relationship between price and supply

Answer 2

as price increases, supply increases as price falls supply falls.

Question 3

what is a market supply

Answer 3

the total supply of a good or service. found by adding individual supply

Question 4

what are the consequences of a shift in supply

Answer 4

economies of scale

efficiency

sales

Question 5

what does inelastic supply mean

Answer 5

he price change will lead to a small change in supply

the PES value will be between 0-1

Question 6

what does elastic supply mean

Answer 6

the price change will lead to a larger change in supply

the PES value will be between 1 and infinity

Question 7

how do you calculate PES

Answer 7

%change in quantity supplied / %change in price

Question 8

how does PES affect consumers

Answer 8

• if supply is inelastic, it will make it more difficult to buy a product without paying more
• PES is elastic it is easier to obtain the product but less flexibility in negotiating price

Question 9

how does PES affect producers

Answer 9

• adapting latest tech
• keeping large amounts of stock
• training employees in more than once job