Supply

• what is supply?


  the amount of a good that producers are wiling and able to supply at a given price in a given time period
• what is a supply curve?


  shows the relationship between the price of the product and quantity supplied.
• what does the y axis of a supply curve show?


  Price
• what does the x axis of a supply curve show?


  Quantity
• what happens as the price of a good rises?


  producers want to supply more as business will pay more as the product becomes more profitable
• what factors can affect supply?

  • price
  • changes in cost of production
  • introduction of new technology
  • indirect taxes
  • government subsidies (grants to encourage supplying)
  • external shocks
• if supply falls which way does the line on a supply curve fall?


  left
• if supply rises what way does the line move on a supply curve?


  right