supply

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Supply
- the ability and willingness to provide a good or service at a particular price at a given monent in time
- PES
  - responsivness of supply to a chnage in price of a good - %change in quantity supplied/% change in price
    - factors affecting PES
      - time - short term - inelastic, long term - more elastic
      - factors of production - if lots of trainig needed - inelastic
      - ease of entry - if hard - inealstic
      - avaivability of subsitiues - lots - elastic
- curve is upwards becamse - if prices are higher firms will increase production to take advatages of high profits
  - encourages new firms to enter - output will increase
    - use up more resources - raise costs - assumes cost of producing a unit increases as output increases
- conditions of supply
  - costs of production - if a business has increase in their costs they will put prices up - shift to left, decrease in costs - shift to right
  - weather
  - goals of supplier - welfare - increase supply
    - gov legislation
  - taxes and subsidies -tax decreases suppy, subsidies increase supply
curve is upwards becamse - if prices are higher firms will increase production to take advatages of high profits
- encourages new firms to enter - output will increase
  - use up more resources - raise costs - assumes cost of producing a unit increases as output increases

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