1. Chapter 5.1

2.  Supply is the willingness and ability of sellers to produce and offer to sell different quantities of a good at different prices during a specific time period

3.  The law of supply states that as the price of a good increases, the quantity supplied of the good increases, and as the price of a good decreases, the quantity supplied of the good decreases Law of Supply: If P  then Q s  If P  then Q s  Where P = price and Q s = quantity supplied EOC study guide Supply & Demand #5

4. Law of Supply: If P  then Qs  If P  then Qs  Law of Demand: If P  then Q d  If P  then Q d 

5.  Remember: “supply” refers to the entire line!  Quantity supplied refers to the number of units of a good produced and offered for sale at a specific price ◦ “quantity supplied” refers to an amount on the line!

6.  A firm’s supply curve is what it sounds like: it is the supply curve for a particular business (firm)  A market supply curve is the sum of all business’ supply curves

7.  The law of supply, which holds that as price rises, quantity supplied rises, does not hold true for all goods; nor does it hold true over all time periods ◦ Goods that cannot be produced anymore—Antonio Stradivai’s violins ◦ Sold out concerts ◦ Beachfront property S P Q Q1Q1 P1P1 P2P2 Q changes by 0% P rises by 10%