THEORY OF SUPPLY- 18-01-2023

The supply of a good refers to....

• stock available for sale

• Actual production of goods

• amount of goods offered for sale at a particular price per unit time

Normally the demand curve will have a _______________ shape

• Upward sloping

• Downward sloping

• Vertical

• Horizontal

If the market supply curve for a product shifts rightwards, what is the best possible explanation for this shift?

• Increase in the price of raw materials

• Introduction of a tax on that product by the government

• Introduction of a new technique that makes the production of that commodity cheaper

• An advertising campaign that is successful in promoting the product

______ leads to an increase in the supply of a commodity without a change in its price.

• Rise in supply

• Contraction in supply

• Expansion in supply

• Fall in supply

Due to the installation of a machine with the latest technology, the cost of production has decreased. I twill lead to:

• a) Expansion in supply

• b) Increase in supply

• c) Contraction in supply

• d) Decrease in supply

The rising portion of ------- Curve is the supply curve

• Average Cost

• Marginal cost

• Total Fixed cost

• Average variable cost