1. NON PRICE FACTORS THAT CAN SHIFT AN ENTIRE SUPPLY CURVE Determinants of Supply

2. Cost of Resources Cost of resources = cost of production. Prices of the resources needed to produce a good or service Cost increases = supply decreases Cost decreases = supply increases

3. Technology Technology will always increase supply in the long run.

4. Competition Competition is referring to the number of products available in the market Ex. Puffs 100  Kleenex 100  Kroger brand 100  Total 300  If Puffs goes out of business there are less products available in the market. There would only be 200 available.  Comp. increases = supply increases (# available goes up)  Comp. decreases = supply decreases (# available goes down)

5. Government is also a determinant, but first Watch Stossel and government subsidy’s.

6. Government Government regulations on producers can influence supply Taxes – what a business must pay to the government Regulations – rules that must be followed (pollution) Subsidies – payments for doing what the gov wants Ex. Taxes increase = supply decreases (less to spend) Taxes decrease = supply increase (more to spend)

7. Producer expectations If producers expect a product to be demanded in the future, they will produce it NOW on the expectation they will make money on it down the road. Ex. – Halloween candy is made in the spring.

8. Prices of Related Goods A related good is one that is similar to the good you are currently producing. Ex. Brush and a comb You are currently producing brushes. You notice that the price of combs is increasing. You think you could make a better profit on combs. Therefore, you switch your production to the related good (combs) to increase the possibility of a profit.

9. The 6 Determinants of supply 1. Cost of resources 2. Technology 3. Competition 4. Government 5. Producer expectations 6. Price of related goods

10. Changes in a supply curve The right is still an increase The left is still a decrease SC3 decrease SC1 increase SC2

11. Worksheet Fun time!! Complete the worksheet on supply for ecobits. It is a grade