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Supply - Coggle Diagram
Supply
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Government Subsidies
These are 'grants' the opposite of indirect taxes, thereby cause the opposite effect, they encourage the supply of a product by cutting the costs of production as the government is offering a subsidy pay out to fund it, therefore will increase production.
External Shocks
Unexpected shocks in the economy ect. can reduce the total quantity supplied of a item available, this would lead to an increase in the price of the item, meaning that production costs rise and firms reduce the amount they are willing to supply.
SUPPLY CURVE
shows the relationship between the price and the quantity of a product that producers want to create and sell, it shows the total amount supplied to the market by all producers, at a range of different prices.
The general rule governing the amount firms are willing to supply is that the more profit they can make by supplying a product, the more they are willing to supply.
Supply is the amount of a good or service that producers are willing and able to provide at a range of different price levels.
Factors leading to a change in supply;
1.changes in costs of production 2. new technology 3.indirect taxes 4. subsidies
5.external shocks
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Changes in price causes a movement along the supply curve.
Lower prices - less supply
Higher prices - more supply
Despite price, other factors leading to a change in supply can cause a shift.
DECREASE IN SUPPLY = LEFT
INCREASE IN SUPPLY = RIGHT