Supply

1. Microeconomics
Lecture 5
Supply

2. Supply
Schedule
Price Quantity $100
$90 9 $90
$80
$80 8
$70
$70 7
$60
$60 6 $50
$50 5 $40
$40 4 $30
$20
$30 3
$10
$20 2
$0
$10 1 0 1 2 3 4 5 6 7 8 9 10

3. Law of Supply
When price falls
quantity supplied decreases
When price increases
quantity supplied increases.

4. Shift Supply
Prices of inputs
Technological change
Price of substitutes in production
Number of firms in the market
Expected Future Prices

5. Change in Supply
vs.
Change in
Quantity Supplied

6. Market Equilibrium
Where
quantity supplied
equals
quantity demanded

7. $100
$90
S1
$80
$70
S2
$60
Price
$50
$40
$30
$20
$10
D1
0
0 1 2 3 4 5 6 7 8 9 10
Quantity

8. $100
$90
S1
$80
$70
S2
$60
Price
$50
$40
$30
$20
$10
D1
0
0 1 2 3 4 5 6 7 8 9 10
Quantity

9. $100
$90
S1
$80
$70
S2
$60
Price
$50
$40
$30
$20
$10
D1
0
0 1 2 3 4 5 6 7 8 9 10
Quantity

10. $100
$90
S1
$80
$70
S2
$60
Price
$50
$40
$30
$20
$10
D1
0
0 1 2 3 4 5 6 7 8 9 10
Quantity

11. $100
$90
S1
$80
$70
S2
$60
Price
$50
$40
$30
$20
$10
D1
0
0 1 2 3 4 5 6 7 8 9 10
Quantity

12. $100
$90 S3
S1
$80
$70
S2
$60
Price
$50
$40
$30
$20
$10
D1
0
0 1 2 3 4 5 6 7 8 9 10
Quantity