2.1 Supply

Question 1

What is supply?

Answer 1

refers to the quantity of a good or service that firms plan to sell at given prices in a particular time period

Question 2

What is the law of supply?

Answer 2

as price increases the quantity supplied will increase

Question 3

What does conditions of supply mean?

Answer 3

factors other then price of the good that lead to a change in the supply curve

Question 4

What are the conditions of supply?

Answer 4

• production costs
• productivity of labour
• taxes on businesses
• production subsidies
• technology

Question 5

causes in shift of supply?

Answer 5

• changes in the unit costs of production
• changes in technology
• government taxes and subsidies
• changes in climate
• change in price of substitute
• number of producers in the market