QUANTITY SUPPLIEDTHE AMOUNT THAT PRODUCERS BRING TO
MARKET AT ANY GIVEN PRICE
CHANGE IN QUANTITY SUPPLIEDTHE CHANGE IN AMOUNT OFFERED FOR SALE IN RESPONSE TO A PRICE CHANGE
INCREASE IN QUANTITY SUPPLIED P
S
Q
INCREASE IN SUPPLY
P
S1
S2
Q
EXAMPLE
TAKE OIL---IF THE PRICE FALLS, THE PRODUCER MAY OFFER LESS UNITS TO SELL---IF IT RISES, HE’LL MOST LIKELY OFFER MORE UNITS TO SELL
CHANGE IN SUPPLY --SHIFT CAPS
P
$25 S S2 THIS RERESENTS 20 A SHIFT IN SUPPLY 15 (INCREASE) 10 5 0 2 4 6 8 10 Q
CHANGES IN SUPPLY OCCUR FOR SEVERAL REASONS(SHIFTERS)
ACRONYM “ROTTENS”
RESOURCE AVAILABILTY(INGREDIANTS)
IF THE AVAILABILITY OF RESOURCES DECREASE, WHAT WILL THE SUPPLY CURVE DO?
NAME SOME RESOURCES FOR MAKING BOOKS.
RESOURCE AVAILABILTY(INGREDIANTS)
NAME SOME RESOURCES FOR MAKING BOOKS.
OTHER GOODS & SERVICES(INPUTS)
IF INPUTS DECREASE, PRODUCERS MAY PRODUCE MORE OF A PRODUCT AT EACH AND EVERY PRICE.
WHAT WOULD THE SUPPLY CURVE DO? IN
OTHER GOODS & SERVICES(INPUTS)
NAME SOME INPUTS
EXAMPLES OR INPUTS
GOVERNMENT REGULATIONSUTILITIES COSTSWORKER PRODUCTIVITYEQUIPMENT COSTS
TECHNOLOGYNEW TECHNOLOGY TENDS TO LOWER THE COST OF PRODUCTION & INCREASE PRODUCTIVITY.WHAT WOULD THE SUPPLY CURVE DO?
TECHNOLOGYNAME AN INSTANCE WHEN TECHNOLOGY WOULD SHIFT THE CURVE THE OTHER WAY.
TECHNOLOGY
• BREAKDOWNS
TAXESIF TAXES GO UP, THE COST OF PRODUCTION GOES UP.WHAT WOULD AN INCREASE IN TAXES DO TO THE SUPPLY CURVE?
EXPECTATIONS #1THIS IS A GUESS OF THE FUTURE PRICE OF A PRODUCT. IF PRODUCERS THINK THE PRICE WILL GO UP, THEY MAY WITHHOLD SOME SUPPLY, CAUSING A ____ IN SUPPLY TO THE MARKET. DE
EXPECTATIONS #1WHICH WAY WILL THE SUPPLY CURVE SHIFT?
EXPECTATIONS #2IF PRODUCERS THINK THE PRICE WILL GO DOWN, THEY MAY _____ SUPPLY TO THE MARKET. IN
EXPECTATIONS #2IN
WHICH WAY WILL THE SUPPLY CURVE SHIFT?
NUMBER OF SELLERSAFFECTS BOTH THE INDIVIDUAL COMPANY AND THE MARKET SUPPLY CURVE.
NUMBER OF SELLERS.WHAT HAPPENS TO THE SUPPLYin
CURVE WHEN MORE FIRMS ENTERTHE MARKET?
SUBSIDIESWHAT ARE THEY?GOVT. PAYMENTS TO ENCOURAGE AN ECONOMIC ACTIVITY
SUBSIDIESGIVE AN EXAMPLE OF A SUBSIDY AND WHAT IT WOULD DO TO THE SUPPLY CURVE.
SUBSIDIESGIVE AN EXAMPLE OF A SUBSIDY AND WHAT IT WOULD DO TO THE SUPPLY CURVE.MILK PRODUCERS PAID NOT TO PRODUCE MILK.
MILK SUBSIDY
GOVERNMENT REGULATIONSINCREASED GOVERNMENT REGULATIONS (IE: NEW SAFETY FEATURES) CAN INCREASE THE COST OF PRODUCTION. WHAT DOES THIS DO TO SUPPLY?