1
Q
Law of Supply
A
Normally, the quantity varies directly with the price
2
Q
Supply
A
The ability and willingness of firms to provide goods and services at each price in a given time period
3
Q
Individual Supply
A
The supply of a good or service by an individual producer
4
Q
Market supply
A
The total supply of a good or service by adding together all individual producer’s supplies
5
Q
Consequences of a shift in supply
A
- Can gain greater economies of scale
- Increase in efficiency
- Increase in sales
- Increase in exports
- Become a monopoly/oligopoly
6
Q
PES
A
Responsiveness of quantity supplied to a change in price of the product
7
Q
Elastic Supply
A
When the percentage change in the quantity supplied is greater than the percentage change in price
8
Q
Inelastic Supply
A
When the percentage change in quantity supplied is less than the percentage change in price
Econ Paper 1
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