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Supply

Supply. the other side of a market Reference 4.1-4.3. What kinds of goods and services are supplied?. Where there is demand, there is supply. SUPPLY. THE WILLINGNESS AND ABILITY TO PRODUCE AND SELL A GOOD OR SERVICE. Law of Supply.

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Supply

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  1. Supply the other side of a market Reference 4.1-4.3

  2. What kinds of goods and services are supplied? Where there is demand, there is supply.

  3. SUPPLY • THE WILLINGNESSANDABILITY TO PRODUCE AND SELL A GOOD OR SERVICE.

  4. Law of Supply • As the price of a good increases, the quantity supplied of that good increases. • As the price of a good decreases, the quantity supplied of that good decreases. Does this sound familiar???

  5. Compare the Law of Supply with the Law of Demand • Discuss with your partner the similarities and differences of the two laws. • Law of Demand, an inverse relationship between price and quantity demanded. • Law of Supply, a direct relationship between price and quantity supplied

  6. Supply Schedules and Supply Curves Apples Typical supply curve: Upward Sloping—a direct relationship

  7. An exception to the Law of Supply:A Vertical Supply Curve • Goods that can no longer be produced • Stradivarius Violins • Art works • Antiques • When there is no time to produce more. • Sold-out concert tickets

  8. NothingFancy H.S. Students don’t get paid for A’s. BigBucks H.S. Students get paid $50.00 for each A. Consider 2 high schools At which high school would you expect to see more A’s? How does your answer relate to the Law of Demand?

  9. Shift to the right Producers will supply more of the good at all prices Shift to the Left Producers will supply less of the good at all prices. Supply Curves Shift

  10. Supply increase Supply decrease

  11. Factors that Can Cause a Supply Curve to Shift • Resource Prices • Technology • Government Action • Taxes • Subsidies • Quotas • Number of Sellers • Weather

  12. Resource Prices • Resource Prices rise, producers will supply less • Resource Prices fall, producers will supply more

  13. Technology • Advancement in technology (skills and knowledge relevant to production) • lowers the cost of production • uses other resources more efficiently

  14. Government Actions • Taxes – Some can increase per-unit costs (left shift) • Subsidies – Government payments for certain actions. (right shift) • Quotas – government restrictions on production, especially imports (left shift)

  15. Number of Sellers. More sellers… • shift supply curve to the . . . right

  16. Elasticity of Supply • Elastic supply = %change Qs > %change P • Inelastic Supply = %change Qs < %change price • Unit elastic Supply = %change Qs = %change price

  17. Classwork: • Read and answer the questions, p. 100/101 • “The Beatles” • “Taxes, Tariffs & America’s Great Depression” • Complete Section Review, p. 103 #1-4 Homework: • P. 104-105 QToA #1-9

  18. Emergency Homework • Read and note Ch 4.2 p. 95-103 • Complete Section Review #1-7 • Question #1 is definitions. Instead of re-writing them, you may highlight them in your notes.

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