Linear supply functions, equations and graphs (HL)

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    Linear supply functions, equations and graphs (HL)

    Supply function: Qs = c + dP

    ‘C’ causes a shift in the supply curve because c = the quantity supplied when the price is 0, so, if c decreases the curve will shift to the left (non-price factors)

    The slope will depend on d (positive because the relation QD=P is)   that is the responsiveness of the producer to a change in price. It can depend on the number of factors of production.