1.2.2 Supply

Supply

The quantity of a product that producers are willing and able to produce at various prices over a period of time.

Profit

Profit = Revenue - CostsRevenue

Revenue

Revenue = Selling price x number of units sold

Profit per unit

Profit per unit = Selling price - Cost per unit or Selling price ÷ Cost per unit

Indirect taxes

Indirect taxes are taxes levied (imposed) by the government onto goods and services

VAT

In the UK, VAT (Value Added Tax) is 20% on most goods and services that you buy

Government subsidies

An amount paid by the government to producers in order to help lower the costs of production and encourage supply

External shocks

Events in the wider world that can affect businesses in positive and negative ways

Events in the wider world that can affect businesses in positive and negative ways

Physical constraints can change certain factors that affect supply

SEPTIC

An acronym to remember the factors that affect supply - Subsidies, External shocks, Physical constraints, Technology, Indirect taxes, and Costs of production

What is supply?

The quantity of a product that producers are willing and able to produce at various prices over a period of time.