The document defines key economic concepts related to supply including: - What supply and quantity supplied are, and how they relate to price - The law of supply, which states that quantity supplied increases with price and decreases with price decreases - Determinants of supply such as changes in costs, technology, profits elsewhere, number of sellers, price expectations, and government actions that can cause the supply curve to shift - The law of diminishing returns as it relates to adding more variable inputs to fixed inputs in production

1. Supply Ms. Ross

2. What is Supply? The amount of a good or service that sellers are willing and able to offer for sale at various prices in a given time period, all other things remaining the same. Supply is represented by the entire supply schedule and curve.

3. What is quantity supplied? The amount of a good or service that sellers are willing and able to offer for sale at a particular price in a given time period, all other things remaining the same.

4. What is the Law of Supply? There is a direct relationship between price and quantity supplied. As price goes up, quantity supplied goes up. As price goes down, quantity supplied goes down.

5. Change in Quantity Supplied? A change in quantity supplied indicates a movement along the curve. The only thing that has changed is the price of the good or service. Think of the supply curve as a street – you can only move up and down the street when the price changes.

6. Law of Diminishing Returns As more units of a variable input are added to one or more fixed inputs, eventually the number of additional units of output will begin to fall. This occurs because the fixed input is spread more and more thinly across the growing number of variable inputs.

7. Happy Economics Day!!! 7 6 5 4 3 2 1 0 Value of Marg. Prod. Marginal Product # of cards # of workers

8. Law of Diminishing Returns Output: greeting cards Variable resource: workers Fixed Resources: capital – 2 markers, desk, chair, scissors and factory.

9. Change in Supply When there is a change in supply (increase or decrease), the supply curve shifts. Using our earlier street analogy, a change in supply means you need to walk on a different street. A change in supply is caused by a change in one or more of the determinants of supply.

10. Determinants of Supply/Supply Shifters Change in the Cost of Factors of Production Change in Technology Change in Profit Opportunities Producing Other Products Change in the Number of Sellers in the Market Change in Producers’ Price Expectations Government Actions