Supply

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  • Created by: lizaloo98
  • Created on: 07-04-16 15:53
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  • Supply
    • Defined
      • the quantity of a good/service producers are willing and able to provide at different market prices over a period of time
    • the supply curve
      • positive linear
      • as price increases, quantity supplied increases, as producers make more of a profit
    • factors influencing supply of a product
      • cost of production
        • e.g. an increase in labour costs would be passed onto the consumers from supply shifting left and increasing price. or an increase in cost of raw materials like oil which is nonrenewable so is getting more expensive. either way they supply less, or absorb the costs and reduce profit.
      • size and nature of industry
        • number of firms
        • this affects competitiveness also
          • the less competitive the more likely prices and costs of production will be passed onto consumers
      • government policy
        • VAT, Subsidies etc
      • weather and conditions needed for production
        • if there is a natural disaster that wipes out production then supply will greatly reduce

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