8/17/2019 Supply Revision A3

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Supply Defnition o Supply;

Supply is the quantity of a good or service producers are able and willing to supply to a

market at a given price. An increase in price will usually lead to an increase in the quantity

supplied and thus there is a positive relationship between price and supply.  

Movement of the supply

curve might be aected

by few factors;

• Cost o

production; This is the key

factor that shifts

the supply curve.

An increase in the

price of factors of

production will

decrease supply

and a decrease in

the price of factors

of production will

increase supply. An

increase in the

productivity of

factors will

increase supply.

 

Technology ;

 

Movement of the supply curve !e"tension#contraction$

 Joint Supply;

An economic term referring to a product or process that can yield two or more outputs. Common examples

occur within the livestock industry: cows can be utilized for milk, beef and hide; sheep can be utilized for

meat, wool and sheepskin. If the supply of cows increases, so will the supply of dairy and beef products

Where joint supply exists, the supply and demand for each product is linked to the others originating from

the same source. For example, if demand increases for wool, and sheep farmers therefore raise more

animals for wool, there will eventually be increased sheep meat production, resulting in greater meat supply

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