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Intro to supply powerpoint

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Intro to supply powerpoint

1. 1.  What do you think of when you hear the word supply?  How do you think supply will be different from demand?
2. 2. Why do producers want to provide products at the highest possible price? SUPPLY
3. 3. SUPPLY  Supply is the willingness (desire) and ability of producers to offer goods and services for sale  Similar to demand: willingness and ability!  Ex: A farmer on antarctica will be unable to produce any crops no matter his/her desire.  Thus, he/she cannot supply markets with products.
4. 4. LAW OF SUPPLY As prices fall, quantity supplied falls.  As prices increase, quantity supplied rises.  This is a direct relationship or positive correlation.   Example: A farmer typically grows carrots and tomatoes. If the market price is \$1 per kg of tomatoes then he/she might produce 50 kg of tomatoes. If the price drops to \$0.50 then he/she might only produce 25kg of tomatoes , so he/she can focus on more carrots.
5. 5. SUPPLY SCHEDULE  A supply schedule is a table that shows how much of a good or service an individual is willing and able to offer at each price.  A market supply schedule is a table that shows how much of a good or service all producers in a market are willing and able to offer
6. 6. EXAMPLE OF A SUPPLY SCHEDULE Look at page 132.  How many pounds of tomatoes will the Smith’s offer for sale if the price is 1.75?   How is this supply schedule different from a demand schedule?
7. 7. EXAMPLE OF MARKET SUPPLY SCHEDULE P.133  How does the quantity supplied of tomatoes change when the prices rises from .75 a pound to 1.75 a pound?   Increases from 100 to 300: an increase of 200lbs
8. 8. APPLICATION B Imagine that you own a health food store that sells several brands of nutrition bars.  Create a supply schedule showing how many bars you would be willing to sell each month at prices of 5, 4, 3, 2, and 1 
9. 9. SUPPLY CURVES  Show the data from supply schedules in graph form  Market supply schedules show data from market supply schedules in graph form.
10. 10. APPLYING APPLICATION B  Take the market schedule you made for application B and create a supply curve  How does this curve look different from a demand curve?
11. 11. SUPPLY CURVES CONT.. Look at page 134, figure 5.4  How many pounds of tomatoes will the Smiths offer for sale when the price is 1.50?   Look at figure 5.5  At which price will all the fruit and vegetable stands want to sell 200 pounds of tomatoes?