Saturday, 7 April 2012

Supply

Market Supply is the combined quantity that all producers of a product will want to sell at a particular price. The biggest impact on supply is the costs, as a business will want to sell a product that delivers a high profit return.
In the short term (a period of time in which a business cannot change fixed costs) existing firms will use spare capacity and introduce overtime or other immediate ways of increasing the output of supply.
Supply can change more in the long run which to economists is the time it takes to make a change in the fixed assets of a business.

On the Supply Graph, if the supply curve moves to the right it means supply has increased and alternatively a move to the left means supply has fallen, perhaps due to industry shrinkage or a rise in costs.

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