How Markets Work - Supply Theory

This revision presentation looks at the basic theory of market supply

The theory of supply focuses on the decisions made by producers who sell goods and services in markets. Essential revision involves checking your understanding of why a change in market price brings about a movement along the supply curve, whereas shifts in the supply curve are caused by changes in the costs of production, the introduction of new technology, indirect taxes and government subsidies. Producer cartels may be a determinant of supply in some markets, for example, oil. Understand the basics of supply and you will be a long way to getting high marks in any question on changing market prices.