Supply Flashcards
(19 cards)
what is supply?
quantity that a produce is willing and able to sell at a given price
what is the law of supply?
there is a positive relationship between price and quantity
if price increases, quantity will also increase
individual supply: ___ producers have their own ___ for different products
____ supply: total supply by __ producers
individual, supply
market, all
a change in price will/ will not cause a change in the supply curve?
will not
a change in price will instead change the ___ willing to produce
this is the ____ reaction of consumers to a change in price
quantity
opposite
rise in price: ___ in quantity supplied, this is an ____ on the curve, movement ____ the curve
increase, expansion, along
lower price:____ in quantity supplied, this is a ___ on the curve, movement ___ the curve
decrease, contraction, along
other factors other than price will cause a ___ along the supply curve
increase - ___
decrease- ___
shift
right
left
factors causing changes to supply (3)
- cost and availability of production
- price of substitutes
- price of complements
- expected future prices
- number of suppliers
- technology
- skills and expertise of producers
- uncontrollable changes (e.g weather)
- government policies
indirect taxes will ____ supply as it is a __ to the producer
decrease, cost
supply is in terms of the __
demand is in terms of the ___
seller
buyer
what is price elasticity of supply?
responsiveness of a change in quantity supplied from a change in price
PES is % change in ___/ % change in ____
quantity, price
PES<1
change quantity smaller than price
supply is ___
inelastic
PES=1
change is in the same proportion
supply is ___
unit elastic
PES>1
change in quantity supplied is greater in proportion to change in price
supply is ___
elastic
perfectly price inelastic supply: PES= ___, items that have a ___ supply
0, fixed
perfectly price elastic supply: PES= ___
items that have such an ___ price that producers are willing to supply an ___ quantity and at any price below this, the producers would ___ be willing to supply any items
this is highly ___ in real life
infinite, acceptable, infinite, not
unlikely
factors affecting elasticity of supply (2)
- time period of production
- availability and mobility of resources
- excess capacity
- availability of stock
