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Theory of Supply - Coggle Diagram

- - - - 2 goods are said to be in competitive supply if they use the same factors of production in the production of the good. The quantity supplied of 1 good is inversely related to the price of the other. This is because when the price of one of the good rises, the profitability of producing it increases, thus producers will increase quantity supplied of the good by diverting the resource from the less profitable good. Thus, leading to a decrease in quantity supplied of the less profitable good.
    - - 2 goods are said to be in joint supply if the production of 1 good leads to the simultaneous production of the other. The quantity supplied of 1 good varies positively with the price of the other.
  - - - Ad-valorem tax
        
        Ad-valorem tax is the tax imposed as a fixed percentage of the price of a good. Since the tax is fixed in percentage terms, the amount of tax price of a good. Since the tax is fixed in percentage terms, the amount of tax per unit of output increases with a higher price. Thus, the supply carve experiences a pivoted leftward shift.
      - Specific tax
        
        Specifix tax refers to the tax levied per unit of output. When a specific tax is imposed, producers will reduce their quantity supplied. Thus, supply curve experiences a parallel leftward shift and the curve shifts vertically upwards by the full amount of tax
    - - subsidies are grants given by the government to help producers cover a part of production cost. It allows producers to be able to increase the quantity supplied without increasing the price of a good. thus, the supply curve will shift rightwards