chapter 7- supply
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14 Terms
what is supply
the quantity of a good/service that a producer is willing and able to sell at a given price over a given period
what is the law of supply
as price rises, quantity supplied increases, ceteris paribus
what does a supply curve show
the relationship between price and quantity supplied
what direction does a supply curve usually slope
upwards from left to right
what causes a movement along the supply curve
a change in the products own price
what causes a shift in supply curve
a change in non-price determinant of supply
what does a rightward shift in supply show
an increase in supply
what does a leftward shift in supply show
a decrease in supply
what factors cause supply to increase
lower production costs, better technology, subsidies, more firms
what factors cause supply to decrease
higher production costs, taxes, fewer firms
how does a subsidy affect supply
it can reduce production cost and increase supply
how does taxes affect supply
it increase costs and decrease supply
what happens if a firm leaves a market
market supply decreases
what is productivity
output produced per unit of input