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Economics

Quizzes & Activities

Supply Theory (Quizlet Activity)

Level:
AS, A Level, IB
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Here are ten terms to revise all linked to the basic theory of supply.

Key terms on the theory of supply to revise:

  • Indirect taxes: A tax on suppliers causes inward shift of supply e.g. the sugar tax
  • Competitive supply: Alternative products a firm could make with its resources. E.g. a farmer can plant potatoes or carrots depending on the price
  • Bottleneck: Any factor that causes production (supply) to be delayed or stopped
  • Subsidies: Government financial support to producers (e.g.farmers) that causes an outward shift of supply
  • Profit motive: Higher prices increase the potential for making higher returns for shareholders
  • Law of supply: Positive relationship between market price and quantity supplied
  • Elasticity of supply: Responsiveness of supply to a change in market price
  • Market supply: Total supply brought to the market by all of the producers at each price
  • Joint supply: When increase/decrease in supply of one good leads to an increase/decrease in supply of a by-product
  • Excess supply: When there are unsold goods in the market

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