3. The determinants of the supply for goods and services

a suppluy curve shows

the relationship between price and quantity supplied

why is supply curve upwards sloping

when prices increase → higher profits are implied → producers are incentivised to expend production → increase in quantity supplied

what is the supply curve under perfect competition

the MC curve as it represents the margial cost of producing extra output and therfore the minimum price suppliers are willing to accept for thier output

causes of shifts in the supply curve

changes in production costs

technology

government regulations

number of sellers in the market

difference between how ad valoram tax and specific/unit tax impact supply

Specific tax → parallel shift of supply curve

Ad valorem(VAT) tax → steeper shift in supply curve as it is a % of price