Question

a) Using the supply schedule given below, draw an accurately labelled supply curve. Also, comment on the shape of the supply curve. Why does the supply curve slope like this? Explain clearly. Price 10 8 6 4 2 Supply 500 400 300 200 100 [Answer in 180 – 240 words] [Draw in paper; take photo and paste/Use MS Word/add screenshot]

b) Do you think the level of technology available have an impact on the supply of a product? Using examples, discuss the impact of technology on supply. [Answer in 60 – 80 words]

c) What do you think the impact of a change in tax on the supply of a product? Using examples, discuss the impact of tax on supply. [Answer in 60 – 80 words]

microeconomics

Answer 1

a)

The shape of the supply curve is the upward sloping because the quantity supplied and price are positive related to each other or the supply curve is upward sloping because of the law of supply which tells that price and quantity supplied is directly proportional to each other , that is if the price increase of the goods, quantity supplied also increase and vice-versa.

b) Yes, the level of technology has an impact on the supply of the goods, because when the technoiogy imporves , the production cost of a good decreases as a result the producer can produce more and supply more at the availble market price to increase thier profits, so the quantity supplied will increase and the supply curve will shift to the right and vice-versa.

c) yes, taxation has a negative effect on supply of a good because when the tax is imposed on the supply of goods, the incentives to supply more of a good decrease as a result the supply decrease and equilbruim price increases and quantity demanded falls and thus we can say that the supply curve will shift to the left indicating a decrease in the supply.