# The Law of Supply Activities You may refer to your notes. Please do not use the text book for these activities.

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The Law of Supply Activities You may refer to your notes. Please do not use the text book for these activities.

1) Write your own definition of supply 1 minute 1 minute1 minute Accurate Answer follows: Supply is the quantity of a good or service which a seller is willing to provide at a particular price over a particular time period. 2) What is the law of supply? Write your own understanding of the law of supply 1 minute 1 minute1 minute Accurate Answer follows: The supply of a good is a function of its own price. Other things equal, the higher the price of a product the more the sellers will supply. There is a positive relationship between price and quantity supplied.

A supply schedule and supply curve Suppose seller supplies soy sauce by the litre– if the price is 1 euro, the supplier will not supply any. Suppose seller supplies soy sauce by the litre– if the price is 1 euro, the supplier will not supply any. If the price is increased to two euros, the seller will supply 5 litres. For every extra euro, the seller will supply an additional 5 litres. If the price is increased to two euros, the seller will supply 5 litres. For every extra euro, the seller will supply an additional 5 litres. 1) Draw a supply schedule from 1 to 6 euros. 2) Draw a graph to show the supply curve. 3) Why might a movement along the curve occur? 4) When such a movement occurs, what do we say has happened? 5) Brainstorm the factors other than price that will affect supply. Think of as much as possible.

The determinants of supply Qs x = f{Px,Px,Ps,Ps,Pf,Pf,G, technology, weather, expectations of the firm}

Sketch the impact on a supply curve for the following and state which factor was involved.: 1) Owner of herd of goats. Supplies goats milk to the market. There is a rise in price of goats cheese. How does this affect supply curve for goats milk? 2) Supplier of newspapers. The price of newsprint increases. 3) Supplier of newspapers. Journalists cost less to employ.

What is the impact on a supply curve for the following and state which factor was involved.: 4) Supplier of coffee. A severe frost occurs. 5) Supplier of mobile phones. Improvements in mobile phone networks occur throughout the country. 6) In Italy, train travel is subsidised by the government. Supply of train services? 7) In Sweden, alcohol is highly taxed. Supply of bottles of vodka at any given price.

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