What is supply? Supply-The amount of a product that would be offered for a sale at all possile prices that could prevail in the market. Supply can be a numerous amount and be priced at any price. Your economic product is your labor, you’re more likely to supply more labor for a high wage than a low one. If workers worked more efficiently, productivity would increase. This would create “Change in Supply” –suppliers selling a certain number of the same product for a sale at all possible prices.Ex:10 pencils for $4.00 are now 18 pencils for the same prize.
If the price of a good falls, the producer is likely to offer less for sale.Ex:Oil If producers think that a product’s prize will be higher in the future, they might withhold it. If cars need to have safety quipment such as air bags, cars will cost more to produce.This leads to less cars of this kind being produced. If a firm can adjust to new prices quickly, it’s likely to be elastic. If quantities are being purchased the concept is demand elastic. If quantity supplied changes very little, supply is inelastic.
Law of Supply In economics, the law of supply is the tendency of suppliers to offer more of a good at a higher price. An example of the Law of Supply is as the price of a good increases, suppliers will want to supply more of it. However, as the price of a good decreases, suppliers will not want to supply as much of it.
FACTORS AFFECTING SUPPLY Technology: ▫The introduction of a new machine, can affect supply by lowering the cost of production or by increasing productivity. ▫New Technology far more often increases supply. Expectations: ▫ Sellers expectations concerning future market condition can directly affect supply. If the seller believes that the demand for his product will sharply increase in the foreseeable future the firm owner may immediately increase production in anticipation of future price increases.
Government policies and regulations: - Government intervention can take many forms including environmental and health regulations, hour and wage laws, taxes, electrical and natural gas rates and zoning and land use regulations.
Quiz (1) How is supply different from demand? (2) Why would producers withhold some of their products? A.because they’re selfish B.the product is not worth selling C.the price will go up in the future (3)What will happen if productivity increases? A.Wal-mart will be the top selling store B.Suppliers will try selling a certain number of the same product at every price in order to get rid of excess C.Less work for the company workers afterwards
(4)What would happen if it takes a lot more money to make a new product? (5) What is the difference between supply schedule and supply curve?(you can find the answer by referring to your vocabulary sheet)