Econ Unit One Day 7

Today’s Topic= Supply

Supply Supply=is the willingness and ability of sellers to produce and offer to sell different quantities of a good at different prices during a specific time period.

Quantity Supplied Quantity supplied=is the number of units of a good produced and offered for sale at a specific price. It is a specific number.

Law of Supply The Law of Supply=as the price of a good increases, the quantity supplied of the good increases, and as the price of a good decreases, the quantity supplied of the good decreases. Price and quantity supplied move in the same direction, giving them a direct relationship. As one factor rises, the other rises, too.

Supply Schedule As with the law of demand, we can use a table or a graph to show how the law of supply works. Supply Schedule= a numerical chart that illustrates the law of supply.

Supply Curve Supply Curve= a graph that shows the amount of a good that sellers are willing and able to sell at various prices.

Vertical Supply Curve Vertical Supply Curve= when the quantity of a good that is available cannot change, regardless of price. An example is the number of seats in a movie theater. An increase in the price will not increase the amount of seats available, because there is not enough time to construct more seats.

The Supply Curve can Shift As supply increases, the supply curve shifts to the right As supply decreases, the supply curve shifts to the left

Factors that cause supply curves to shift 1. The prices of resources influence the supply of a good. When resource prices fall, sellers are willing and able to produce more of the good and offer it for sale. 2. Technology also causes a shift in the supply curve. Technology is the body of skills and knowledge concerning the use of resources in production. An advancement in technology is the ability to produce more output with a fixed amount of resources. An advancement in technology can help lower the per-unit cost, which is the average cost of producing the good.

Factors that cause supply curves to shift 3. Taxes on production can increase the per-unit costs of producing a good. Taxes cause the supply curve to shift to the left. 4. Subsidies are monetary payments made by government for certain actions. Subsidies can increase production, causing the supply curve to shift to the right. 5. Quotas are restrictions on the number of units of a foreign- produced good, or import, that can enter a country. A quota decreases supply, shifting the supply curve to the left.

Factors that cause supply curves to shift 6. The number of sellers can also impact the supply curve. If more sellers begin producing a good, supply increases, shifting the supply curve to the right. 7. Expectations of future price movements can cause sellers to either increase or decrease the current supply. 8. Weather can also affect the supply of a good. Think of the effect that weather can have on the supply of agricultural goods such as corn and wheat.