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Understanding: Market Supply Curves Video Lecture | Economics for JAMB

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FAQs on Understanding: Market Supply Curves Video Lecture - Economics for JAMB

1. What is a market supply curve?
Ans. A market supply curve is a graphical representation of the quantity of a product that all suppliers are willing to offer at different prices in a specific market. It shows the positive relationship between price and quantity supplied, indicating that as the price increases, suppliers are willing to produce and offer more of the product.
2. How is a market supply curve derived?
Ans. A market supply curve is derived by horizontally summing the individual supply curves of all suppliers in the market. Each individual supply curve represents the quantity of the product that a specific supplier is willing to offer at different prices. By adding up the quantities supplied by all suppliers at each price level, we obtain the market supply curve.
3. What factors can cause a shift in the market supply curve?
Ans. Several factors can cause a shift in the market supply curve. Some of the common factors include changes in production costs, technological advancements, changes in the prices of inputs or raw materials, taxes or subsidies, government regulations, and changes in the number of suppliers in the market. These factors can either increase or decrease the quantity of the product that suppliers are willing to offer at each price.
4. How does a change in price affect the market supply curve?
Ans. A change in price does not shift the market supply curve but rather causes a movement along the curve. When the price of a product increases, suppliers are motivated to produce and offer more of it, resulting in an upward movement along the supply curve. Conversely, if the price decreases, suppliers may reduce the quantity they are willing to supply, leading to a downward movement along the curve.
5. Can the market supply curve ever be vertical?
Ans. Yes, the market supply curve can be vertical under certain circumstances. When the quantity supplied by all suppliers in the market remains the same regardless of the price, the market supply curve becomes vertical. This can occur when the suppliers have reached their maximum production capacity, or when there are scarce resources or limited availability of inputs, leading to a fixed quantity supplied regardless of price changes.
162 videos|102 docs|66 tests

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