1.2.4: Supply

• Supply: Willingness and ability of a firm to supply a good at a given price
• Joint supply: 2 or more goods deriving from a single production process
• Individual supply: A producer's supply of a good or service
• Market supply: All producers' supplies to the market summed together
• As price increases, quantity supplied increases
• Movements along the supply curve are caused by changes in price
• The supply curve slopes upwards, because higher prices motivate firms to supply more due to higher profit margins
• The supply curve also slopes upwards because increasing production increases marginal cost of production, meaning higher prices are needed to cover the costs
• Factors shifting Supply (PINTSWC)

  Productivity

  Indirect tax

  Number of firms

  Technology

  Subsidies

  Weather

  Cost of production