Some of the factors below influence the supply of an individual firm - Leaving Cert Economics - Question 3 - 2018
Question 3
Some of the factors below influence the supply of an individual firm.
Write True or False after each of the following sentences.
(i) The price of the good itself.
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Worked Solution & Example Answer:Some of the factors below influence the supply of an individual firm - Leaving Cert Economics - Question 3 - 2018
Step 1
The price of the good itself.
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Answer
True. The price of the good directly influences the supply curve. According to the law of supply, as the price of a good increases, the quantity supplied also increases.
Step 2
The consumer's level of income.
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Answer
False. The consumer's level of income affects demand but not directly the supply of a firm.
Step 3
The cost of the firm's raw materials.
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Answer
True. The cost of raw materials affects the supply, as higher costs can lead to a reduction in the quantity of goods supplied.
Step 4
The state of the firm's production technology.
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Answer
True. Advancements in production technology can enhance efficiency and increase supply.
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