Chapter 4 - Supply

• Competitive market

  A market in which individual firms cannot influence the price of the good or service they are selling due to competition from other firms
• What influences supply?

  • Costs
  • Technology
  • Taxes
  • Subsidies
  • Prices of other goods
  • Expected prices
  • The number of firms in the market
• Producer surplus

  The difference between price received by firms for a good or service and the price at which they would have been prepared to supply that good/service