Ch5 - supply curve

Cards (10)

  • Supply
    The amount of goods that producers are willing and able to offer to customers at a given price
  • Supply curve
    • Upward sloping (the curve slopes up from left to right)
    • Shows the proportionate relationship between price and quantity supplied
  • When price goes up
    Quantity supplied will go up
  • When price goes down
    Quantity supplied will also go down
  • Reason for upward sloping supply curve
    Businesses are motivated by profit. If prices are rising, existing businesses will be willing to supply an increasing amount of a good because they may make more profit.
  • Movement along the supply curve
    When the price of a good changes
  • Shift in the supply curve
    Movement to the left or right of the entire supply curve when there is a change in any factor affecting supply (except the price)
  • Fixed supply
    In some circumstances, the supply of a product or service maybe fixed
  • Supply curve with fixed supply
    • Vertical
  • With a fixed supply, it is impossible for sellers to increase supply even when prices rise