supply

• what is supply?

  how much a producer is willing to make a product or service available on the market at a given price.
• what are some factors that effect supply?

  cost of production, indirect taxes, new technology, external shocks
• why would the cost of production affect supply?


  if the cost of production increases, the business may produce less and prices will go up, the product will have lower sales
• why does the introduction of technology help to increase supply?

  new technology can mass produce products which increases the supply
• why do external shocks affect supply?


  businesses may not want to supply at current levels such as war and weather problems
• what does surplus mean?


  where supply exceeds demand due to the price being too high which decreases demand
• what is a shortage?

  where demand exceeds supply there will be a shortage
• where is the equillibrium point on the graph?

  the point where the supply curve meets the demand curve