Download to read offline
Uploaded byTravis Klein
3 law of supply
In 3 sentences or less: You ask what the minimum hourly wage I would accept is to work at Subway, pretending there is no minimum wage. The document then discusses determinants of supply such as price of production, resources, taxes, regulations, expectations of future prices, number of sellers, and technology. It provides examples of how these factors can increase or decrease the quantity supplied and illustrates supply curves on graphs.
3 law of supply
- 1. In your notes: Whatis 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. Graph subway workerson board • Jumping jacks market
- 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. For example…. • Averageprices of • Therefore…..
- 5. Graph one: A SupplyCurve Price of Widgets Number of Widgets Sellers Want to Sell $1.00 10 $2.00 40 $3.00 70 $4.00 140
- 6. Producer Surplus • Differencebetween cost and sale price • IOW: profit • Sale: $15 • Cost: $10 • PS = $5
- 7.
- 9. In your groups •Choose either a computer company or a car company • Your boss wants your group to figure out how to produce MORE of your goods per year • Consider every factor of production (land, labor, capital)
- 10. If price changesQ*supply, What changes supply?
- 11. 4 Determinants ofSupply • Price of production + or – • Resources • Taxes • regulation
- 12. 4 Determinants ofSupply • Expectations of future price • If future P$ might rise, hold inventory • If future P$ might fall, increase supply
- 13. 4 Determinants ofSupply • Sellers (increase or decrease)
- 14. 4 Determinants ofSupply • Technology
- 15. 4 Determinants ofSupply Mnemonic • Price of Production • Expectations • Sellers (#) • Technology •PEST = supply determinants •TRIBE = demand determinants
- 16. 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.