1.2.4: Supply

• Supply: The ability and willingness to provide a good or service at a given price at a given time
• Movement along the supply curve is caused by change in price of the good.
• Increase in supply due to price change is called extension, while decrease is called contraction
• Factors affecting supply (PINTS WC)

  Productivity: Higher productivity means higher supply

  Indirect tax: Decreases supply if applied by governments

  Number of firms: Larger number of firms means greater overall supply

  Technology

  Subsidies: Subsidised firms will supply more

  Weather: Good weather at the right time increases supply for some industries e.g farming

  Costs of Production: Increase in this will decrease supply