The document discusses the standard model of supply. It defines supply as a producer phenomenon and explains that the dependent variable in the supply model is the quantity supplied, while the independent variables are the good's own price, input prices, technology, and taxes/subsidies. It presents the law of supply graphically and shows that as price decreases, quantity supplied also decreases. The document also introduces the supply equation, where quantity supplied (Qs) equals the intercept (c) plus the slope (d) multiplied by price (P). It provides examples of using the supply equation to solve for the slope (d) given two data points of price and quantity supplied.

1. Supply slide 1
MODEL OF SUPPLY
an attempt to explain the amount supplied of
any good or service
SUPPLY DEFINED
Supply is a producer phenomenon

2. Supply slide 2
Law of Supply
PQs
Price Quantity Supply
P Qs

3. Supply slide 3
THE “STANDARD” MODEL OF
SUPPLY
• The DEPENDENT variable is the amount
supplied.
• The INDEPENDENT variables are:
• the good’s own price
• the prices of inputs used in its production
• the technology of production
• taxes and subsidies

4. Supply slide 4
As P ↓ - Qs ↓
P Qs
₱5 10
₱4 8
₱3 4
₱2 2
₱1 0
₱ 5
₱ 4
₱ 3
₱ 2
₱ 1
2 4 108
P
Qs
determinants
- Δ In price input
- Δ In Technology
- # of supplies
decrease in supply
increase in supply

5. Supply slide 5
Supply Equation
Qs = c + dP
Qs = quantity supply
c = intercept quantity supplied when price is zero
P = market price
d = slope change in quantity supplied for very change in price

6. Supply slide 6
Qs = c + dP
Qs =
c =
P =
d =
givens: ₱ 35 , ₱ 5
?
25
5
35 to 5
Divisible by the lowest price
d=
𝐶
𝑙𝑜𝑤𝑒𝑠𝑡 𝑝𝑟𝑖𝑐𝑒
Qs = c + dP
-25 + 5(35) =
-25 + 5(30) =
-25 + 5(25) =
-25 + 5(20) =
-25 + 5(15) =
-25 + 5(10) =
-25 + 5(5) =
125
150
100
75
50
25
0
P Qs
35 150
30 125
25 100
20 75
15 50
10 25
5 0
P
Qs
5
10
15
20
30
25
35
150125100755025

7. Supply slide 7
Solve the following Supply Equation
Qs = c + dP
1. givens: ₱ 50 , ₱ 10
2. givens: ₱ 75 , ₱ 20
3. givens: ₱ 100 , ₱ 25