SUPPLY

SUPPLY The amount of a good sellers (producers) are willing and able to sell at every price Flu Shot

Quantity Supplied Increases Law of Supply When Price Increases Quantity Supplied Increases

Ben’s Supply Schedule No-Friends Rabbit No-Friends Rabbit 29

Supply Curve The supply curve is the graph of the relationship between the price of a good and the quantity supplied. 29

Figure 5 Ben’s Supply Schedule and Supply Curve Price of Price of rabbits Quantity of rabbits supplied $0.00 .50 1.00 1 1.50 2 2.00 3 2.50 4 3.00 5 No-Friends Rabbit $3.00 2.50 1. An increase in price ... 2.00 1.50 1.00 0.50 1 2 3 4 5 6 7 8 9 10 11 12 Quantity of No-Friends Rabbit 2. ... increases quantity of rabbits supplied.

Elasticity of Supply Measure of how much suppliers respond to a change in market conditions.

What determines if the supply of a good is elastic or inelastic? The type of resources that are used to produce the product play a major role in the elasticity of supply of the good or service What determines if the supply of a good is elastic or inelastic?

Resources and Elasticity The harder the good or service is to produce, the more inelastic it is The easier the good or service is to produce, the more elastic it is.

BRAIN BUSTA! Think of an apple. What is the major resource that determines whether an apple is elastic or inelastic? TIME!

Short Run vs. Long Run Elasticity Over time, supply of products become more elastic Initially, supply is usually more inelastic

Supply Activity In your bell work, write 3 goods or services, they can be anything Look at items and decide whether the supply of that good or service is elastic or inelastic. (please explain you reasons)