Law of Supply Concepts

Flashcards for key vocabulary related to the Law of Supply.

Law of Supply

The quantity supplied of a good or service is directly related to its price, ceteris paribus.

Ceteris Paribus

A Latin phrase meaning 'all other things being equal' used in economic analyses.

Individual Supply Schedule

A table showing the quantity of a good that a single supplier will supply at various prices.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity supplied.

ROTTEN

An acronym representing the determinants of supply: Resource costs, Other goods’ prices, Taxes/Subsidies, Technology, Expectations, and Number of firms.

Shifting Supply Curve

A change in the supply curve, indicating a change in the quantity supplied at every price level.

Positive Correlation

A relationship where both variables move in the same direction; as one increases, the other does as well.

Decrease in Supply

A leftward shift of the supply curve indicating a decrease in the quantity supplied at every price.

Increase in Supply

A rightward shift of the supply curve indicating an increase in the quantity supplied at every price.

Expectations of Producers

Producers adjust their supply based on their expectations for future demand for their goods.

Patents

Legal protections that restrict other suppliers from producing the same product, affecting supply.