1. Understanding Supply
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2. Supply The Amount of goods available
How do producers decide on how much to supply?
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3. Law of Supply The higher the price, the larger the quantity produced.
+, + Positively Correlated
Companies will produce more of a higher priced good so their profits will increase.
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4. Quantity Supplied
How much of a good is offered for sale at a specific price.
How much does it cost to produce, materials, shipping, etc...
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5. Supply
As the price of a good rises, existing firms will produce more in order to earn additional revenue.
At the same time, new firms will enter the market
Disco music in 1970's, New bands started making music.
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6. Supply Schedule
Supply Schedule - A table that shows the relationship between price and quantity supplied for a specific good.
Supply Schedule also shows the price, and how only the price affects output.
All other factors remain constant
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7. Market Supply Market Supply Schedule-
shows the relationship between prices and the total quantity supplied by all firms in a particular market.
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8. Market Supply
When the data points in a supply schedule are graphed, they create a supply curve
Similar to a demand curve except horizontal axis measures the quantity of the good supplied.
It Rises from left to right
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9. Elasticity of supply
A measure of the way suppliers respond to a change in price.
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10. Understanding
Supply
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11. SUPPLY
The amount of a good or service that producers are willing & able to supply at each price.
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12. LAW OF SUPPLY OPPOSITE OF DEMAND!
Producers offer more of a good when its price is high and less when its price is low.
OPPOSITE OF DEMAND!
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13. Quantity Supplied
Term used to describe how much of a good is offered at a specific price.
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14. The goal of producers is…
REMEMBER
The goal of producers is…
PROFIT
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15. Very similar to a demand schedule.
Supply Schedule
Supply Schedule – shows relationship between price & quantity supplied for a specific good.
Very similar to a demand schedule.
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16. Market Supply Schedule
Market Supply Schedule – same as for supply schedule but it includes all the firms in the market.
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17. Graphical Representation
Supply Curve – graphical representation of the supply schedule.
- same as demand, except the horizontal (X) axis is quantity supplied not demanded.
- Slopes up from left to right
- OPPOSITE OF DEMAND! S
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19. The End
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