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DO NOW

DO NOW. If you owned a birthday cake company, what would be the minimum price that you’d be willing to sell your product if you chose to produce it? How did you come up with that number?. SUPPLY!!!. Why and how do firms produce? How do we shift Supply. What is supply?.

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DO NOW

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  1. DO NOW • If you owned a birthday cake company, what would be the minimum price that you’d be willing to sell your product if you chose to produce it? • How did you come up with that number?

  2. SUPPLY!!! Why and how do firms produce? How do we shift Supply

  3. What is supply? • Firm: a company or seller • Supply Schedule: Numerical depiction of all quantities supplied at each price. • Supply Curve: Graph of all Quantities Supplied at each Price.

  4. Sample Supply Curve *Price does not shift the curve!

  5. Supply = Marginal Cost! • Supply shows willingness to sell each unit = Marginal Cost! • Upward sloping because of Law of Diminishing Marginal returns (discussed later in the semester) * S = MC

  6. GETWIN: 6 things shift S • Government influence - Business/product (Excise) Taxes, subsidies, quotas, restrictions • Expectation of Future Price (opposite of D) • Technology and productivity • Weather (Note: may also shift D!) • Input prices (metal for cars…) • Number of Sellers

  7. What does a shift look like?

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