Ans 1. Supply refers to the amount of a product or service that producers are willing and able to offer for sale at a given price and time. The Law of Supply states that as the price of a good or service increases, the quantity supplied by producers increases, and vice versa.
Ans 2. A supply schedule is a table that shows the quantity of a good or service that producers are willing to supply at various prices, holding all other factors constant.
Example:
Example:Price per unit (in dollars) | Quantity supplied
(Look at the Picture)
3) A supply curve is a graphical representation of the relationship between the price of a good or service and the quantity supplied by producers. It slopes upwards, indicating that as the price of the good or service increases, the quantity supplied by producers also increases. A demand curve, on the other hand, slopes downwards, indicating that as the price of a good or service increases, the quantity demanded by consumers decreases.
4. The eight factors that can cause a change in supply are:
Price of inputs
Technological advances
Taxes and subsidies
Number of sellers
Expectations of future prices
Changes in the price of related goods
Natural and environmental events
Government regulations
5. Elasticity of supply measures the responsiveness of the quantity supplied of a good or service to changes in its price. The three cases of supply elasticity are:
Inelastic supply: When the percentage change in quantity supplied is less than the percentage change in price (i.e., the supply is relatively unresponsive to price changes).
Unit elastic supply: When the percentage change in quantity supplied is equal to the percentage change in price (i.e., the supply is exactly as responsive to price changes as the change in price).
Elastic supply: When the percentage change in quantity supplied is greater than the percentage change in price (i.e., the supply is relatively responsive to price changes).
6. The elasticity of supply is determined by the availability of resources, the ease of substituting inputs, and the time period under consideration. Elastic supply means that small changes in price lead to large changes in quantity supplied, while elastic demand means that small changes in price lead to large changes in quantity demanded.
7. Total revenue is the total amount of money that a firm earns from selling its products or services, which is calculated as price per unit multiplied by the quantity sold. Total cost is the sum of all the costs of producing a good or service, including both fixed costs (such as rent and salaries) and variable costs (such as materials and labor). The two costs that when combined equal total cost are fixed costs and variable costs.
8. The three stages of production are:
Stage 1: The stage of increasing returns, where additional units of the variable input (e.g., labor) lead to increasing output due to specialization and division of labor.
Stage 2: The stage of diminishing returns, where additional units of the variable input lead to smaller increases in output due to limited capacity of fixed inputs (e.g., machinery).
Stage 3: The stage of negative returns, where additional units of the variable input lead to a decrease in output due to overcrowding and inefficiencies. The names of each stage help identify the relationship between input and output as production increases, levels off, and eventually decreases.