Team 01
What is supply?
ability of industry to PRODUCE a product or SUPPLY a service
Factors that affect shift in supply?
•Production technology improves
•Costs / availability of resources change
•Prices of other commodities – substitutes and compliments
•Expectations
Taxes and subsidies.
If there is an increase in disposable income
right shift of the demand curve
Direct positive Relationship
Price rises,Qty also increases
Supply curve shifts to the right
consider what happens in the ice cream market, If the price of ice lollies increases
right shift of the demand curve
If the price rises
Quantity also rises
Decrease in supply?
Supply curve shifts to the left.
what happens in the ice cream market,If the price of mouse traps increases
NO Change
if the prices decreases
Qty also decreases
Market Equillibrium ?
•Where supply meets demand.
Excess Demand-Shortage resulted in
demand will push the prices up
Slope upwards and to the right?
Supply curve
If there is an increase in the price of TVs units?
left shift of the demand curve
Opportunity Cost
the loss of other alternatives when one alternative is chosen.