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# Supply

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### Transcript

• 1. Supply Ms. Ross
• 2. What is Supply?
• 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.
• Supply is represented by the entire supply schedule and curve.
• 3. What is quantity supplied?
• 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.
• 4. What is the Law of Supply?
• There is a direct relationship between price and quantity supplied.
• As price goes up, quantity supplied goes up.
• As price goes down, quantity supplied goes down.
• 5. Change in Quantity Supplied?
• 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.
• Think of the supply curve as a street – you can only move up and down the street when the price changes.
• 6. Law of Diminishing Returns
• 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.
• This occurs because the fixed input is spread more and more thinly across the growing number of variable inputs.
• 7. Happy Economics Day!!! 7 6 5 4 3 2 1 0 Value of Marg. Prod. Marginal Product # of cards # of workers
• 8. Law of Diminishing Returns
• Output: greeting cards
• Variable resource: workers
• Fixed Resources: capital – 2 markers, desk, chair, scissors and factory.
• 9. Change in Supply
• When there is a change in supply (increase or decrease), the supply curve shifts.
• Using our earlier street analogy, a change in supply means you need to walk on a different street.
• A change in supply is caused by a change in one or more of the determinants of supply.
• 10. Determinants of Supply/Supply Shifters
• Change in the Cost of Factors of Production
• Change in Technology
• Change in Profit Opportunities Producing Other Products
• Change in the Number of Sellers in the Market
• Change in Producers’ Price Expectations
• Government Actions