Question

In no more than five(5) lines of typed text below this question, define the Economics term "SUPPLY", describe how it is graphically illustrates, and specifically identify two changes in market circumstances that might result in decrease in SUPPLY. Be specific.

Answer 1

Supply means the total amount of specific good or service available to consumers at a specific price. Price and supply proportionately related that is supply increases when the price is increased and vice versa so supply curve is positively sloped.

Example of changes in the market that decrease supply

1)When the cost of production is increased, supplier supply less to increase profit.

2) In a year country faces flood which destroys half of the country. Then supply will be decreased.

Supply curve shifts to the left when supply is decreased.

Supply curve shifts from SS! to SS2 as supply decrease.