Supply  Supply – the amount of good and services that sellers are willing and able to sell all prices

The Law of Supply Law of Supply – the higher the price offered, the larger the quantity produced by the supplier; the lower prices offered, the lower quantity supplied Law of Supply – the higher the price offered, the larger the quantity produced by the supplier; the lower prices offered, the lower quantity supplied Producers want to sell more at a higher price Producers want to sell more at a higher price Supply Quantity Supplied Increases Price As Prices Increase Supply Quantity Supplied Falls Price As Prices Fall

The Supply Schedule and Curve Supply Schedule - the table of the total amount consumers are willing and able to sell at all prices at a specific point in time. Supply Schedule - the table of the total amount consumers are willing and able to sell at all prices at a specific point in time. Supply Curve - A graphic representation of the individual or market supply scheduleSupply Curve - A graphic representation of the individual or market supply schedule

The Supply Schedule and Curve Price per slice of pizza $ Quantity Supplied of Slices of Pizza PriceQuantity

Price Quantity The Supply Curve is always upward sloping, because as the Price goes up people want to sell more.

What Causes Shifts in the Supply Curve? The supply curve will NEVER shift if it is just due to PRICE. The supply curve will NEVER shift if it is just due to PRICE. When price changes, it is only a change along the curve, up and down, and only the quantity supplied will change with the new price. When price changes, it is only a change along the curve, up and down, and only the quantity supplied will change with the new price.

Why does the supply curve shift? TIGERS Determinants of SupplyWhat this means T Changes in Technology More Tech = Faster, Make More = Supply Increases Less Tech = Slower, Make Less = Supply Decreases I Changes in the Cost of Inputs Costs More to Make = Less Money = Supply Decreases Costs Less to Make = More Money = Supply Increases G Changes in Government Policy (Government Subsidy) Subsidy = More Money = Supply Increases

E Changes in Producer Expectations of the future Expect Price to Drop = Supply Increases Expect Price to Rise = Supply Decreases R Changes in Government Policy (Regulations & Taxes) Taxes = Less Money = Supply Decreases S Changes in the Number of Suppliers More Producers = Supply Increases Less Producers = Supply Decreases

What does a shift in supply look like? Price Quantity Increase Supply

What does a shift in supply look like? Price Quantity Decrease Supply

Let’s Practice! These are NOT in your packet! Follow along on the Smart board! With Whiteboards! Oooooooh ! P Q

P Q Record Strawberry Season – Price Highest in Two Decades! How will this information likely affect the supply of strawberry short cakes? On your whiteboard, Draw your Base Graph On your whiteboard, Draw your Base Graph Now, read the Headline AND corresponding question. Now, read the Headline AND corresponding question. Think about TIGERS Think about TIGERS Will it cause an increase or decrease in Supply? Will it cause an increase or decrease in Supply? Which shifter? Which shifter? Show this on your graph by drawing a NEW supply curve… Don’t forget about IRDL! Show this on your graph by drawing a NEW supply curve… Don’t forget about IRDL! _____ in Supply in _____________________ Cost of Inputs

Nike Opening 100 Factories Worldwide How will this information likely affect the supply of Nike shoes? Price Quantity ______ in Supply in ________________________ # of Suppliers Nike Shoes

Hollister Announces Decrease in Price on all Hoodies How will this information likely affect the supply of Hollister’s hoodies? Price Quantity ______ in Supply in ________________________ PRICE Quantity Supplied Hoodies

Government Passes Tax on Cartons of Cigarettes How will this information likely affect the supply of cigarettes? Price Quantity ______ in Supply in ________________________ Government Policy (Excise Tax) Cigarettes

Congress Approves Subsidy for Midwest Corn Farmers How will this information likely affect the supply of corn? Price Quantity ______ in Supply in ________________________ Government Policy (Subsidy) Corn

Apple Introduces the Gadget Pro 1400 that Speeds up iPad Production How will this information likely affect the supply of Apple iPads? Price Quantity ______ in Supply in ________________________ Technology Apple iPads

Analysts Predict American Airlines Flight Tickets to Increase in the Year 2013 How will this information likely affect the supply of airline tickets? Price Quantity ______ in Supply in ________________________ Producer Expectations Airline Tickets

SUPPLY HEADLINES #1 Individual In-Class Practice

Headline A Record Peach Harvest – Price Lowest in a Decade How will this information likely affect the supply curve for frozen peach pies? Price Quantity ______ in Supply in ________________________ Cost of Inputs Frozen Peach Pies

Headline B U.S. Car Company to Close Six Factories How will this information likely affect the supply curve for the company’s minivans? Price Quantity ______ in Supply in ________________________ # of Suppliers Minivans

Headline C Shoe Manufacturer Increases Prices on All Styles How will this information likely affect the supply curve for the company’s sneakers? Price Quantity ______ in Supply in ________________________ PRICE Quantity Supplied Sneakers

Headline D Gas Prices to Stay Low this Year – Rise Dramatically Next Year How will this information likely affect the supply curve for gasoline? Price Quantity ______ in Supply in ________________________ Producer Expectations Gasoline

Headline E Robots Make Automobile Assembly Faster, Cheaper How will this information likely affect the supply curve for cars? Price Quantity ______ in Supply in ________________________ Technology Cars

Headline F Congress Passes New “Sugar Tax” How will this information likely affect the supply curve for sugar? Price Quantity ______ in Supply in ________________________ Government Policy (Excise Tax) Sugar

Headline G President Approves Subsidy for Solar Energy Industry How will this information likely affect the supply curve for solar energy panels? Price Quantity ______ in Supply in ________________________ Government Policy (Subsidy) Solar Energy Panels

Review Supply Homework Questions

Headline A Adidas Closing 100 Stores Nationwide How will this information likely affect the supply curve for Adidas Shoes? Price Quantity ______ in Supply in ________________________ # of Producers Addidas Shoes

Headline B Gap Announces Increase in Price on all Jean How will this information likely affect the supply curve for the company’s skinny jeans? Price Quantity ______ in Supply in ________________________ PRICE Quantity Supplied Gap Skinny Jeans

Headline C Record Apple Season – Price Lowest in Two Decades? How will this information likely affect the supply curve for apple pies? Price Quantity ______ in Supply in ________________________ Cost of Inputs Apple Pies

Headline D Jersey Shore’s Snooki is Upset – Congress Passes Tax on Tanning Beds How will this information likely affect the supply curve for tanning beds? Price Quantity ______ in Supply in ________________________ Government Policy (Excise Tax) Tanning Beds

Headline E President Obama Approves Subsidy to Help Mama Murray’s Pizza Shop How will this information likely affect the supply curve for pizza from Mama Bench’s? Price Quantity ______ in Supply in ________________________ Government Policy (Subsidy) Mama Murray’s Pizza

Headline F T-900 Machine Makes Toothpaste Tubes Faster & Cheaper! How will this information likely affect the supply curve for toothpaste? Price Quantity ______ in Supply in ________________________ Technology Toothpaste

Headline G Softball Bat Prices to Decrease Dramatically How will this information likely affect the supply curve for softball bats? Price Quantity ______ in Supply in ________________________ PRICE Quantity Supplied Softball Bats

Let’s Review Law of Supply Law of Supply PRICE As prices go up… SUPLY quantity supplied goes up PRICE As price goes down… SUPPLY quantity supplied goes down.

?? Price of pizza Quantity Supplied Price of pizza Quantity Supplied Let’s Review What’s this…? Supply

What does a change in Quantity Supplied look like? Movement along a supply curve shows a change in quantity supplied Movement along a supply curve shows a change in quantity supplied For example: For example: Movement from point A to B Movement from point A to B ONLY CAUSED BY PRICE ONLY CAUSED BY PRICE Supply A B

What Causes a Shift in Supply? Change in T echnology Change in T echnology Change in Cost of I nputs (FoPs) Change in Cost of I nputs (FoPs) Change in G overnment Policy (Subsidy) Change in G overnment Policy (Subsidy) Change in Producer E xpectations of the future Change in Producer E xpectations of the future Change Government Policy ( R egulations & Taxes) Change Government Policy ( R egulations & Taxes) Changes in the Number of S uppliers Changes in the Number of S uppliers

Decrease in Supply Original Supply Curve Quantity Price S1S1 S2S2 S3S3 Increase in Supply What does a shift in supply look like? Shift from S 1 to S 2 is an increase in supply Shift from S 1 to S 2 is an increase in supply More supplied at each price More supplied at each price Shift from S 1 to S 3 is a decrease in supply Shift from S 1 to S 3 is a decrease in supply Less supplied at each price Less supplied at each price

What is the most confusing part of supply?

Pop Quiz! Whaaaaat?

Stations For each of the following problems, state which curve would shift: the supply curve or the demand curve. Then state whether the curve would shift to the right (an increase in supply or demand), or shift to the left (a decrease in supply or demand). (Hint: Beware of two trick questions!)

MarketEventWould the demand curve or supply curve shift? Would the curve shift to the right or left?

CURRENT EVENTS

On your POST IT….On your POST IT…. Write your NAMEWrite your NAME ON THE FRONT:ON THE FRONT: Name ALL Demand and Supply FactorsName ALL Demand and Supply Factors ON THE BACKON THE BACK Explain the LAW of DEMAND and LAW OF SUPPLYExplain the LAW of DEMAND and LAW OF SUPPLY