Supply

• What is the definition of supply in economics?


  Supply is the quantity of a good or service that producers are willing and able to produce at a given price in a given time period.
• How does the law of supply relate price and quantity supplied?


  The law of supply states that there is a direct relationship between price and quantity supplied.
• What happens to quantity supplied when the price increases?


  As the price increases, quantity supplied also increases.
• What is the significance of ceteris paribus in the law of supply?


  Ceteris paribus allows us to isolate the relationship between price and quantity supplied by assuming all other factors remain unchanged.
• How is the supply curve represented graphically?


  The supply curve is drawn upward sloping to indicate the direct relationship between price and quantity supplied.
• What is an extension of supply?


  An extension of supply occurs when quantity supplied increases as price increases along the supply curve.
• What is a contraction of supply?


  A contraction of supply occurs when quantity supplied decreases as price decreases along the supply curve.
• Why do producers supply more when prices increase?


  Producers supply more when prices increase due to the profit motive, as higher prices can lead to greater profits.
• What are non-price factors that can affect supply?


  Non-price factors include productivity, indirect taxes, number of firms, technology, subsidies, weather, and costs of production.
• What happens to the supply curve when non-price factors increase supply?


  • The supply curve shifts to the right.
  • This indicates an increase in supply at the same price.
• What happens to the supply curve when non-price factors reduce supply?


  • The supply curve shifts to the left.
  • This indicates a decrease in supply at the same price.
• What does the acronym "PINTS WC" help to remember?


  "PINTS WC" helps to remember the non-price factors that can shift the supply curve.
• What does "P" stand for in "PINTS WC"?


  "P" stands for productivity, which affects costs of production.
• How does productivity affect the supply curve?


  Increased productivity lowers costs of production, shifting the supply curve to the right.
• What effect do indirect taxes have on the supply curve?


  Increased indirect taxes raise costs of production, shifting the supply curve to the left.
• How does the number of firms in the market affect supply?


  More firms in the market shift the supply curve to the right, increasing supply.
• What is the impact of technology on the supply curve?


  Improvements in technology reduce costs of production, shifting the supply curve to the right.
• What is a subsidy in the context of supply?


  A subsidy is a money grant given by governments to producers to lower costs of production and encourage output.
• How does weather affect supply?

  Good weather can shift the supply curve to the right, while bad weather can shift it to the left.
• What are some costs of production that can affect supply?

  Costs of production include transport costs, labor costs, raw material prices, and government regulations.
• What is the relationship between price changes and movements along the supply curve?


  • When the price of a good or service increases, we move up the supply curve (extension of supply).
  • When the price decreases, we move down the supply curve (contraction of supply).
• What is the overall conclusion about supply covered in the material?


  • Supply is defined by the quantity producers are willing to produce at a given price.
  • The supply curve is upward sloping due to the profit motive.
  • Non-price factors can shift the supply curve.