ecom supply text

Law of Supply

The principle that producers will supply more of a product at higher prices and less at lower prices.

Supply

The amount of goods and services that producers are willing and able to supply at various possible prices.

Quantity Supplied

The amount of a good or service producers are willing and able to supply at a particular price.

Supply Schedule

A table listing quantities of a product that producers are willing to supply at various prices.

Supply Curve

A graphic representation showing the relationship between the price of an item and the quantity supplied.

Profit Motive

The desire to make money that impacts producer decisions in free-enterprise markets.

Profit

The amount of money remaining after producers have paid all of their costs.

Determinants of Supply

Factors affecting supply including producer expectations, price of resources, government tools, technology, competition, and prices of related goods.

Elasticity of Supply

The degree to which changes in price affect the quantity supplied.

Elastic Supply

When a small change in price results in a major change in quantities supplied.

Inelastic Supply

When a change in price has little impact on quantities supplied.

What does the Law of Supply state?

Producers will supply more of a product at higher prices and less at lower prices.

What is represented by a Supply Schedule?

Specific combinations of price and quantities supplied.

What is the impact of the Profit Motive?

It governs how producers make decisions and how resources are used in the economy.

Which factors are included in the costs for producers?

Wages, salaries, rent, interest on loans, utilities, raw materials, etc.

What does Elastic Supply indicate?

A small change in price causes a major change in quantities supplied.

What does Inelastic Supply indicate?

Changes in price have little effect on the quantity supplied.