supply (6)

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12 Terms

1
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What is supply?
The amount producers are willing and able to sell at a particular price and time.
2
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What is quantity supplied?
The amount producers are willing and able to sell at a given price and time.
3
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State the law of supply.
As price rises, quantity supplied rises; as price falls, quantity supplied falls, ceteris paribus.
4
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What relationship exists between price and quantity supplied?
A positive (direct) relationship.
5
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Why does the law of supply exist?
Because higher prices increase profitability and encourage greater production.
6
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What is the profit motive?
The desire of firms to maximise profit.
7
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What does ceteris paribus mean in supply?
All other factors affecting supply remain unchanged.
8
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What is a supply schedule?
A table showing quantities supplied at different prices.
9
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What does a supply curve show?
The relationship between price and quantity supplied.
10
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What does an upward-sloping supply curve indicate?
That higher prices encourage greater quantities supplied.
11
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What is on the Y-axis of a supply graph?
Price.
12
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What is on the X-axis of a supply graph?
Quantity supplied.