A Level Economics AQA Practice Exam

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Which acronym helps to remember the factors of supply?

SPICE
ROTTEN
PESTLE
SWOT

The correct answer is: ROTTEN

The acronym that helps to remember the factors of supply is indeed ROTTEN. This stands for the key determinants that influence supply in economics, which are: - **R**: Resource costs – the prices of the inputs used to produce goods. - **O**: Other goods' prices – the impact of prices of related goods on supply decisions. - **T**: Technology – advancements that can improve efficiency and increase supply. - **T**: Taxes and subsidies – government interventions that can alter costs and therefore supply levels. - **E**: Expectations – producers' outlook on future market conditions that affects current supply decisions. - **N**: Number of sellers – the amount of market competitors impacting overall supply. Understanding this acronym is crucial as it encapsulates the various external factors that can influence how much of a product producers are willing and able to supply at different price levels. This foundational understanding of supply factors is essential for analyzing market behavior and can provide insights into price formation and shifts in supply curves.