1. What impact does supply have on price? Do Now: Airline ticket prices-- why do fluctuate the most? Supply: The amount that producers are willing and able to make available for sale at various prices Supply Schedule: chart showing the quantity supplied by producers at various prices Supply Graph: line graph showing the quantity supplied by producers at various prices

2. The Supply Schedule Shop Rite’s Supply of Bottled Water PQSQS $0.500 $1.001 $1.503 $2.004 $2.509

3. The Supply Curve S

4. The Law of Supply States as price increases, the quantity supplied ________________ Also states as price decreases, the quantity supplied _________________ A direct relationship

5. Changes in Quantity Supplied A change in the quantity supplied is different from a change in supply. Change in quantity supplied is ONLY affected by price. PQSQS 51 102 153 204 255 Antonio’s Supply of Pizza

6. Changes in Supply What will shift the supply curve either right or left? Resource Costs Technology Taxes Price Expectations Number of Sellers in the Market

7. Resource Costs General Motors has been feverishly producing cars this year. The price of steel, however, has been slowly increasing. Create a supply schedule and curve to show the change in supply.

8. Technology Explain, through the use of a schedule and a graph, how the supply of I-Pods would change given the abundance of MP3s available on the Internet.

9. Market Supply Studying the supply of a group of producers for a certain good/service at various prices How To Determine Market Supply: Add the quantity supplied for all people at each price

10. Market Supply Schedule Market Supply of Gel PQ S Herbal Essences Q S Suave Q S Pantene Q S Garnier Q S Market $.50 $1.00 $1.50 $2.00 $2.50

11. Supply & Demand We bring together supply and demand to see how the buying decisions of consumers and the selling decisions of businesses help determine the price of the item and the quantity bought/sold.

12. Equilibrium Definition: The point at which the quantity supplied meets the quantity demanded What does equilibrium look like graphically? E

13. Equilibrium Equilibrium Price: the price at which quantity supplied meets quantity demanded Equilibrium Quantity: the quantity at which quantity supplied meets quantity demanded

14. Surpluses & Shortages Surplus: having excess supply of a good/service due to a smaller demand than the quantity supplied Shortage: not having enough of a good/service due to a larger demand than the quantity supplied

15. Surpluses & Shortages DS Surplus Shortage E

16. Price Ceilings Maximum legal price that can be charged for a good or service Allows people to obtain goods or services that could not be previously afforded Ex: Rent (Major Cities)

17. Price Ceilings E S D P Q $5 Do price ceilings results in surpluses or shortages? On your graph, shade the area which shows a surplus or shortage. 3

18. Price Floors Minimum price that can be charged for a good or service Helps business owners with low incomes Example: Farmers Government sets price floor for bushel of wheat at $3, even though the equilibrium price is $2