1. The Law of Supply SSEMI2a: Define the law of supply
SSEMI3a: Identify and illustrate on a graph a shift in supply

2. Price is high, supply is high
Price is high, supply is high. With supply: think like a producer (as opposed to demand—we think like consumers)

3. The Law of Supply
According to the law of supply, suppliers will offer more of a good at a higher price.
Price
As price increases…
Supply
Quantity supplied increases
Price
As price falls…
Supply
Quantity supplied falls

4. This is because: Will produce more for a higher price
More incentive to get in the market and produce

5. Supply Schedules
How much of a good suppliers will offer at different prices
Price
Quantity Supplied
$0.50 50
$1.00
100
$1.50
150
$2.00
200
$2.50
250

6. Supply curve

7. Price per slice of pizza Slices supplied per day
Supply Schedules
A market supply schedule is a chart that lists how much of a good all suppliers will offer at different prices.
$.50
1,000
Price per slice of pizza
Slices supplied per day
Market Supply Schedule
$1.00
1,500
$1.50
2,000
$2.00
2,500
$2.50
3,000
$3.00
3,500

8. Output (slices per day)
Supply Curves
Market Supply Curve
Price (in dollars)
Output (slices per day)
3.00
2.50
2.00
1.50
1.00
.50
500
1000
1500
2000
2500
3000
3500
A market supply curve is a graph of the quantity supplied of a good by all suppliers at different prices.
Supply

9. Elasticity of Supply
Elasticity of supply is a measure of the way quantity supplied reacts to a change in price.
If supply is not very responsive to changes in price, it is considered inelastic.
An elastic supply is very sensitive to changes in price.

10. Shifts in supply Inputs Technology Government: 3 things Global economy
Future Prices
Number of suppliers

11. GOOD
Inputs
*example and illustrate on a graph
Technology
*example and illustrate on graph
Future expectations of prices
Number of Suppliers
Global Economy
Government: subsidies
Government: Taxes