1.2.4 Supply

Cards (3)

  • Supply is the quality of a good or service that a producer is willing and able to supply at a given price during a given time.
  • Reasons for the upward slope of the supply curve.
    1. If prices increase, it is more profitable for firms to supply the good.
    2. High prices encourage new firms to enter the market.
    3. Larger outputs means firms costs increase, so they need to charge a higher price to cover the costs.
  • Factors Causing a Shift in the Supply Curve (PINTSWC)
    P = Productivity
    I = Indirect Taxes
    N = Number of Firms
    T = Technology
    S = Substitutes
    W = Weather
    C = Cost of Production