Question

Match the following: Group A i) Perfectly Elastic Supply ii) Stock iii)Increase in supply iv)Perfectly Inelastic Supply v) Total Cost / Total Quantity Group B a) Vertical supply curve b) Horizontal supply curve c) Potential supply d) Rightward shift in supply curve e) Leftward shift supply curve f) Average cost

Answer 1

i) Perfect Elastic supply- Horizontal supply curve

When a graph is plot for perfectly elastic supply it leads to the formation of a horizontal supply curve.

ii) Stock - c) Potential supply

Stock is considered as major factor on which potential supply is dependent.

iii) Increase in supply – d) rightward shift in supply curve

When a graph is plot for increase in supply it leads to the formation of rightward shift in supply curve.

iv) Perfectly Inelastic Supply – a) Vertical supply curve

When a graph is plot for Perfectly Inelastic Supply it leads to the formation Vertical supply curve.

v) Total Cost / Total Quantity - f) Average cost

The formula for average cost is (Total cost)/(Total quantity).