Supply (1.2.2) Flashcards
(10 cards)
What is supply?
The number of goods/ services businesses are willing to sell at a given price in a specific time period
What is the General Rule for Supply? (P +QS)
The higher the price the higher the quantity supplied. Direct relationship between supply and price
Is a supply curve seen with and upwards or downwards sloping line?
Upwards sloping
Factors leading to a change in Supply? (5 Factors)
-Changes in the costs of production
-Intro of new tech
-Indirect Taxes
-Government Subsidies
-External Shocks
What does an Indirect Tax do to a Supply Graph?
VAT increases price of good and so supply shifts to the left and decreases.
What is Cost of Production? What does it do to supply?
The expenses that the businesses incur to produce goods or services. They vary depending on type, size and business sector. If Labour costs increase so does the cost of production and output for a business decreases. So supply shifts to the left and decreases. Brexit, corona etc.. have increases the cost of production for businesses.
What does a subsidie do to a Supply Graph?
Grant decreases price of good and so supply shifts to the right and increases.
What is Digital Manufacturing? What does it do to supply?
Aims to make process of production more efficient. It will bring down the cost of production as tech improves efficiency and so supply curve will shift to the right as increased output. This will mean firms can sell more.
VAT and how it affects Supply?
VAT is Value Added Tax ytaht you have to pay when you buy goods or services. The standard Rate is 20%. It affects supply by shifting it to the left because the cost of production is increased and so price is increased. Firms will loose sales due to VAT.
Subsidies and how they affect Supply?
Subsidies are a financial contribution using public resources. Subsidies shift the supply curve to the right because it increases the output of a business as they have more money to spend on production and so have an increased supply overall.
