What is supply in the context of market economics?
The amount of a product which suppliers will offer to the market at a given price
A general rule is that the higher the price, the greater the quantity offered in the market.
What does a supply schedule show?
The relationship between price and quantity supplied
Example: Price of 2 corresponds to a quantity supplied of 20 tones.
What is the shape of the supply curve?
Slopes upwards
This reflects the direct relationship between price and quantity supplied.
Name one factor influencing supply.
- Costs of production
- Taxes imposed by government
- Subsidies paid by government
- Weather conditions
- Advances in technology
- External shocks
Changes in these factors can alter the conditions of supply.
True or false: An increase in taxes imposed on suppliers will lower their costs.
FALSE
Taxes raise the costs for suppliers.
What effect do subsidies have on suppliers?
Reduce their costs
Subsidies are payments made by the government to suppliers.
How can weather conditions influence supply?
Good growing weather can lead to high crop production and increased supply
Adverse weather can have the opposite effect.
What is the impact of advances in technology on supply?
Lower the cost of production
This can lead to increased supply.
What does a shift to the left in the supply curve indicate?
Smaller quantities will be supplied than before at given prices
This can occur due to various factors affecting supply.
What does a shift to the right in the supply curve indicate?
Larger quantities will be supplied than before at given prices
This reflects an increase in supply.
Fill in the blank: Changes in one or a combination of factors will cause shifts in the _______.
supply curve
The shifts can be to the left or right.
