1. What does supply mean?

supply relates to the quantity of goods or services that a producer or a supplier is willing to bring into the market at a particular price in a given time period, all other things being equal.

2. What does the law of supply state?

The law of supply states that the quantity of a commodity supplied varies directly with its price, all other factors that may determine supply remaining the same. The law of supply expresses the relationship between prices and the quantity of goods and services that sellers would offer for sale at each and every price. In other words, the higher the price of a product, the higher the quantity supplied.

3. What is a supply schedule?

The relationship between price of a product and its quantity supplied is represented in a table called a supply schedule.

4. What is a supply curve?

The supply curve is a graphic representation of the market supply schedule and the law of supply. The supply curve shows a direct relationship between the quantities of products that firms are willing to produce and sell at various prices, all non-price factors being constant. Sloping upward from left to right the supply curve reflects that producers supply more at a higher price and less at a lower price.

5. Why do producers supply more goods at a higher price than at a lower price?

Sellers want to charge as much as they can. They will be willing to make more and sell more as the price goes up. In this way they can maximize profits. The law of supply states that the higher the price of a product, the higher the quantity supplied.

6. When and why do suppliers increase their production and rise prices?

Sellers want to charge as much as they can. They will be willing to make more and sell more as the price goes up. In this way they can maximize profits. As the price of a commodity increases relative to price of all other goods, business enterprises switch resources and production from other goods to production of this commodity, increasing the quantity supplied.

7. What role do prices play for producers?

Sellers, on the other hand, want to charge as much as they can. They will be willing to make more and sell more as the price goes up. In this way they can maximize profits.

8. What is a change in supply caused by?

A change in supply is caused by a change in the non-price determinants of supply.

9. What are the key non-price determinants of supply?

there are things other than price which affect the amounts of goods and services suppliers are able to bring into the market. These things are called the non-price determinants of supply. Changes in the cost of production. Changes in technology. Changes in the price of resources needed to produce goods and services. Changes in the expectations of future prices. Changes in the profit opportunities.Changes in the number of suppliers in the market.