1.2.2 Supply

• What is the definition of supply?

  Quantity producers offer for sale
• Higher costs of production lead to a decrease in supply
• How does an increase in price affect supply?

  Encourages producers to offer more
• Technological advancements can increase supply by improving efficiency.
• What is the impact of more sellers on market supply?

  Increases market supply
• The supply curve shows the relationship between price and quantity supplied.
• The law of supply states that as price increases, quantity supplied also increases.
• Compare the Law of Supply and the Law of Demand

  1️⃣ Law of Supply: Price up, Quantity supplied up

  2️⃣ Law of Demand: Price up, Quantity demanded down
• What is the primary aim of producers according to the Law of Supply?

  Maximize profits
• The supply curve slopes upwards from left to right, showing a positive correlation between price and quantity supplied.
• Match the aspect with the correct law:

  Relationship between Price and Quantity ↔️ Positive for Supply, Negative for Demand

  Producers ↔️ Willing to supply more at higher prices
• The upward slope of the supply curve reflects the positive correlation between price and quantity supplied.
• What causes a movement along the supply curve?

  Changes in price
• Order the factors affecting supply based on their impact:

  1️⃣ Cost of Production: Higher costs decrease supply

  2️⃣ Price: Higher prices increase supply

  3️⃣ Technology: Advances increase efficiency and supply

  4️⃣ Number of Sellers: More sellers increase supply

  5️⃣ Government Regulations: Taxes and subsidies can increase or decrease supply

  6️⃣ Expectations: Future price expectations affect current supply
• The supply curve slopes upwards from left to right, demonstrating a positive correlation between price and quantity supplied.
• Match the aspect with the correct law:

  Relationship between Price and Quantity ↔️ Positive for Supply, Negative for Demand

  Producers ↔️ Willing to supply more at higher prices
• What happens to the supply curve when the price decreases?

  Moves downwards along the curve
• The Law of Supply states that producers are willing to offer more of a product for sale at higher prices to maximize profits.
• When the price of a good increases, the supply curve moves upwards along the curve.
• When price increases, manufacturers are incentivized to increase production
• The supply curve shows a positive correlation between price and quantity supplied.
• The supply curve is plotted with price on the y-axis and quantity supplied on the x-axis.
• The law of supply states that producers offer more at higher prices.
• What type of change causes movement along the supply curve?

  Change in price
• Match the price change with the corresponding quantity supplied movement:

  Price increases ↔️ Quantity supplied increases

  Price decreases ↔️ Quantity supplied decreases
• A shift in the supply curve occurs when factors other than price affect the quantity supplied.
• A decrease in the cost of production shifts the supply curve to the right.
• What happens to the supply curve if the number of sellers increases?

  It shifts to the right
• A government subsidy in the electric vehicle market reduces the cost of production, shifting the supply curve to the right.
• What does the law of supply state about the relationship between price and quantity supplied?

  Positive relationship
• Higher production costs lead to a decrease in supply.
• Anticipated future prices and demand are referred to as expectations, which can affect current supply decisions.
• What do producers aim to maximize at higher prices?

  Profits
• Compare the Law of Supply and the Law of Demand:

  Law of Supply ↔️ Positive relationship

  Law of Demand ↔️ Negative relationship
• The supply curve slopes upward because higher prices incentivize producers to supply more.
• Describe the movements along the supply curve in response to price changes:

  1️⃣ Price increases, move upward

  2️⃣ Price decreases, move downward
• Changes in price cause movements along the supply curve.
• What is the impact of lower production costs on the supply curve?

  It shifts to the right
• Movement along the supply curve occurs due to changes in price, not shifts in the curve itself.
• If the price of electric vehicles increases, manufacturers will produce more, resulting in an upward movement along the supply curve.