Unit 1C

Supply

The quantity of a good or service a producer is willing and able to supply at various prices at a point in time

Law of supply

An increase in the price of a good or service will lead to an increase in quantity supplied, ceteris paribus (or vice versa)

Change in quantity supplied

A movement along the supply curve caused only by a change in the price of the good itself

Change in supply

A shift of the entire supply curve caused by non

Related goods (supply)

What else can be produced with the same resources (e.g. raspberries or strawberries)

Revenue

The value of total sales = price of each item × quantity sold

Subsidy

A payment from government to producers that lowers costs and increases supply

Indirect tax

A tax on goods/services that raises producers' costs and decreases supply