Supply Supply is the various quantities of a good or service that producers are willing to sell at all possible market prices.

Supply Supply is the output of a single business or producer. Individual supply would be the supply of one producer or business. Market supply would be the supply for the entire market.

Supply Supply is the opposite of demand. They go hand in hand in determining prices and goods and services available. Buyers/Consumers demand goods. Producers supply goods.

Law of Supply This is the principle that suppliers will normally offer more for sale at higher prices and less for sale at lower prices. It is the opposite of the law of demand. Buyers buy more at lower prices. Suppliers supply more at higher prices. It creates competition between buyers and suppliers.

Supply Schedule This is a numerical chart that show the quantity supplied at different possible prices.

Supply Curve This is a graph that shows the amount of a product that would be supplied at all possible prices in the market. The curve slopes upward.

Profit Motive Profit is the money a business receives for its products or services after its costs are subtracted. Businesses invest time, money, and other resources in order to make a profit. This is their motive.

Factors Affecting Supply Supply can increase or decrease- as a result of many different factors: Price Cost of production Government policies Number of producers Competition Expectations of businesses

When Supply Goes Down When supply decreases, the supply curve moves to the left. This means that supply decreases at all different possible prices.

When Supply Goes Up When supply goes up, the supply curve is pushed to the right. In this case, suppliers are willing to sell a larger quantity of goods and services at all possible prices.

Productivity By improving productivity, businesses can cut costs and increase profits. It is the degree to which resources are being used efficiently to produce goods and services. This usually increases supply, decreases costs, and increases profits.

Technology Technology refers to the methods or processes used to make goods and services. Improving technology increases productivity.

Elasticity of Supply Supply can be elastic or inelastic. Supply elasticity is a measure of how the quantity supplied of a good or service changes in response to changes in price.

Elastic Supply If the quantity changes a great deal when prices go up or down, the product is said to be supply elastic. Kites, candy, and other products that can be made quickly without high costs or skilled labor are generally elastic. If consumers are willing to pay higher, most producers of elastic goods can gear up production quickly.

Inelastic Supply If the quantity changes very little when prices go up or down, the product is said to be supply inelastic. Oil is supply inelastic. When oil prices go up, oil companies cannot quickly find a new site with oil, dig a new well, build a new pipeline, and build a refinery to turn it into gasoline. Products that require skilled labor, have heavy costs, etc… have generally inelastic supply.

Supply and Demand Markets bring buyers and sellers together. They are influenced by supply and demand. The forces of supply and demand work together in markets to establish prices. Prices help determine economic decisions.

Supply and Demand Schedule This shows supply quantity and demand quantity at a list of possible prices.

Supply and Demand Curve A supply and demand curve is a graph that shows quantity supplied and quantity demanded at possible prices. It also pinpoints a meeting point, or equilibrium, between the two curves.

Surplus A surplus is the amount by which the quantity supplied is higher than the quantity demanded This is the horizontal distance between the curves at any point above where the lines intersect.

Shortage A shortage is the amount by which the quantity demanded is higher than the quantity supplied. The shortage is the horizontal distance between the two curves at any price below the point where the curves meet.

Equilibrium Price The point where price and demand balance is the equilibrium point. On the supply and demand graph, where the two curves meet is the equilibrium point. Equilibrium means balance.

Price Controls Occasionally the government sets the price of a product because it believes that the forces of supply and demand are unfair. A price ceiling is a government-set maximum price that can be charged for a good or service. This protects the consumer. A price floor is a government minimum price that can be charged for goods and services. This protects the producer.

Prices Price is how much something costs. Prices are signals. They help producers and consumers make decisions. They help answer the questions- what to produce, how to produce, and for whom to produce.

Prices Prices help us to compare goods and seek the best value. They provide information. Prices are neutral because they favor neither the producer nor consumer- they are the result of competition and reaching balance.

Prices Prices are flexible because they fluctuate as a result of shifting supply and demand curves. Prices provide for freedom of choice because there is generally a variety of products at a wide range of prices. They encourage competition. Prices are also familiar- they are easily understood.

Advantages of Prices 1. They are neutral 2. They are flexible 3. They provide for freedom of choice 4. They are familiar