3 law of supply

229 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
229
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

3 law of supply

  1. 1. In your notes: What is the minimum, per hour I would have to pay you to work at Subway? Pretend there is no minimum wage and you could work for less than $7.85
  2. 2. Graph subway workers on board • Jumping jacks market
  3. 3. Law of Supply • As the price of a good increases, producers will produce more (,or try to) quantity. As the price of the good decreases, producers will produce less quantity. P Qs and P Qs The supply curve is always upward sloping $ Q S
  4. 4. For example…. • Average prices of • Therefore…..
  5. 5. Graph one: A Supply Curve Price of Widgets Number of Widgets Sellers Want to Sell $1.00 10 $2.00 40 $3.00 70 $4.00 140
  6. 6. Producer Surplus • Difference between cost and sale price • IOW: profit • Sale: $15 • Cost: $10 • PS = $5
  7. 7. For example….
  8. 8. In your groups • Choose either a computer company or a car company • Your boss wants your group to figure out how to produce MORE of your goods per year • Consider every factor of production (land, labor, capital)
  9. 9. If price changes Q*supply, What changes supply?
  10. 10. 4 Determinants of Supply • Price of production + or – • Resources • Taxes • regulation
  11. 11. 4 Determinants of Supply • Expectations of future price • If future P$ might rise, hold inventory • If future P$ might fall, increase supply
  12. 12. 4 Determinants of Supply • Sellers (increase or decrease)
  13. 13. 4 Determinants of Supply • Technology
  14. 14. 4 Determinants of Supply Mnemonic • Price of Production • Expectations • Sellers (#) • Technology •PEST = supply determinants •TRIBE = demand determinants
  15. 15. PEST Changes Assignment 1. For each part of PEST, identify one positive and negative change to the car or computer market and sketch a correctly drawn graph 2. Find an article either on your phone or in a financial magazine, write the headline, the market, part of PEST that is changing and graph it.

×