Understanding Supply in Business

What does the law of supply suggest about the relationship between price and quantity supplied?

• Higher prices lead to lower supply.

• Higher prices lead to higher supply.

• Lower prices lead to higher supply.

• Price does not affect supply.

How might businesses manipulate supply to increase demand?

• By increasing production costs.

• By lowering prices significantly.

• By limiting supply to create urgency.

• By increasing the number of suppliers.

What happens to supply when production costs decrease?

• Supply becomes unpredictable.

• Supply increases.

• Supply remains unchanged.

• Supply decreases.

Which of the following is NOT a factor that influences supply?

• Government subsidies

• Changes in production costs

• Introduction of new technology

• Consumer preferences

How can new technology affect the supply of products?

• By making production less efficient.

• By increasing production costs.

• By reducing the quality of products.

• By allowing more efficient production.

What is an indirect tax?

• A tax directly paid by consumers.

• A tax on property.

• A tax on income.

• A tax imposed on goods and services.

How can the government stimulate supply in a market?

• By increasing indirect taxes.

• By increasing production costs.

• By reducing subsidies.

• By lowering indirect taxes.

What is the purpose of government subsidies?

• To encourage increased supply.

• To increase production costs.

• To reduce consumer demand.

• To decrease supply.

Which of the following is an example of an external shock?

• A change in consumer preferences.

• A natural disaster.

• A technological advancement.

• A new government policy.

How can severe weather conditions impact supply?

• By making production more efficient.

• By reducing the need for government subsidies.

• By causing disruptions in the supply chain.

• By increasing the availability of raw materials.