What Effect Will Each of the Following Have Upon the Supply

question 45

Essay

What effect will each of the following have upon the supply of television sets? Explain your reasoning in each case.(a) an increase in the price of electronic equipment used in producing television sets
(b) a decline in the number of firms producing television sets
(c) a large new tariff on imported Japanese TV sets
(d) new inexpensive satellite dishes which make televisions more popular among consumers

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Definitions:

Average Variable Cost

The total variable costs divided by the quantity of output produced, reflecting the per unit cost of variable inputs.

Average Fixed Costs

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced, a measure that decreases as production increases.

Average Variable Costs

The sum of all costs that fluctuate based on the amount of production, divided by the total units of output created.

Average Fixed Costs

The costs that do not vary with the level of output production, such as rent, salaries, and insurance.