7.0 - supply

Question 1

name the factors of market supply

7.1 - factors of market supply

Answer 1

• price (producer’s willingness to produce)
• price of other G&S
• the state of technology (more supply with + tech)
• change of FOP costs
• quantity avaliable (of produce and resources)
• climate and seasonal influence

Question 2

define the supply schedule

7.2 - movements along the supply curve

Answer 2

quantity for a good supplied over a range of prices at a given point in time (supply curve is the graphical representation of the supply schedule)

Question 3

outline the factors that cause shifts in the supply curve

7.3 - shifts of the supply curve

Answer 3

• price of other G&S
• state of technology
• costs of FOP’s
• quantity of avaliable resources
• climate and seasonal change

Question 4

describe the effect of supply lag on elasticity of supply

7.5 - factors affecting elasticity of supply

Answer 4

• greater time to respond to price changes results in more supply elasticity
  (short-run elasticity increases minimally)
  (long-run increase of inputs, FOP’s, capital = reletivly elastic supply)

Question 5

describe the effect of ability to store stock on elasticity of supply

7.5 - factors affecting elasticity of supply

Answer 5

• stock of goods (inventory)
• can be offered when prices rise after economic downturn
• easier to inventory = more elastic supply

Question 6

describe the effect of excess capacity on elasticity of supply

7.5 - factors affecting elasticity of supply

Answer 6

• supply is more elastic with excess capacity, ability to quickly respond to price change