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# Supply

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### Supply

1. 1. Supply Ms. Ross
2. 2. What is Supply? <ul><li>The amount of a good or service that sellers are willing and able to offer for sale at various prices in a given time period, all other things remaining the same. </li></ul><ul><li>Supply is represented by the entire supply schedule and curve. </li></ul>
3. 3. What is quantity supplied? <ul><li>The amount of a good or service that sellers are willing and able to offer for sale at a particular price in a given time period, all other things remaining the same. </li></ul>
4. 4. What is the Law of Supply? <ul><li>There is a direct relationship between price and quantity supplied. </li></ul><ul><li>As price goes up, quantity supplied goes up. </li></ul><ul><li>As price goes down, quantity supplied goes down. </li></ul>
5. 5. Change in Quantity Supplied? <ul><li>A change in quantity supplied indicates a movement along the curve. The only thing that has changed is the price of the good or service. </li></ul><ul><li>Think of the supply curve as a street – you can only move up and down the street when the price changes. </li></ul>
6. 6. Law of Diminishing Returns <ul><li>As more units of a variable input are added to one or more fixed inputs, eventually the number of additional units of output will begin to fall. </li></ul><ul><li>This occurs because the fixed input is spread more and more thinly across the growing number of variable inputs. </li></ul>
7. 7. Happy Economics Day!!! 7 6 5 4 3 2 1 0 Value of Marg. Prod. Marginal Product # of cards # of workers
8. 8. Law of Diminishing Returns <ul><li>Output: greeting cards </li></ul><ul><li>Variable resource: workers </li></ul><ul><li>Fixed Resources: capital – 2 markers, desk, chair, scissors and factory. </li></ul>
9. 9. Change in Supply <ul><li>When there is a change in supply (increase or decrease), the supply curve shifts. </li></ul><ul><li>Using our earlier street analogy, a change in supply means you need to walk on a different street. </li></ul><ul><li>A change in supply is caused by a change in one or more of the determinants of supply. </li></ul>
10. 10. Determinants of Supply/Supply Shifters <ul><li>Change in the Cost of Factors of Production </li></ul><ul><li>Change in Technology </li></ul><ul><li>Change in Profit Opportunities Producing Other Products </li></ul><ul><li>Change in the Number of Sellers in the Market </li></ul><ul><li>Change in Producers’ Price Expectations </li></ul><ul><li>Government Actions </li></ul>