Standard SSEMI2a. Define the Law of Supply and the Law of Demand. SSEMI3a- Identify and illustrate on a graph factors that cause changes in market supply

Price REVIEW: Supply Quantity Supplied Supply is the amount of product offered for sale at all possible prices Law of Supply: the principal that suppliers will normally offer more for sale at high prices and less at lower prices Price Law Of Quantity Supplied Supply

REVIEW: Supply Schedule List of the various quantities of a particular product supplied at all possible prices in the market. Quantity Supplied Price

Price REVIEW: Supply Curve Quantity Supplied A graph showing the various quantities supplied at each and every price that might prevail in the market. Price Law of Supply Quantity Supplied

Right is MORE (increase) Left is LESS (decrease) Remember: What shifting curves: Right is MORE (increase) Left is LESS (decrease)

Supply and Quantity Supplied

Change in Quantity Supply Quantity Supplied: the amount producers bring to the market at a given price Change in quantity supplied: the change in the amount offered for sale in response to a change in price

A new curve is not created when the price changes! Quantity Supplied A change is Quantity Supplied …. DOES NOT create a different supply curve It is a movement along the same curve!

Change In Supply A situation where suppliers offer different amounts of products for sale at possible prices in the market

Determinants of Supply There are 7 factors that can change supply (create a new supply curve). We remember them with the acronym: S T E P I N G

Subsidies and taxes Subsidy: a government payment to an individual, business, or other group to encourage or protect a certain type of economic activity Firms view taxes as costs which causes the cost of production. An increase in cost moves the supply curve to the left.

Technology New inventions or innovation It affects the production cost. New technology moves the curve right.

Expectations How producers feel about the future of their product. If producers think the price of their product will go up in the future, they may withhold some of the supply.

Productivity This is how efficient workers are. More efficient the more the supply curve will move to the right.

Cost of Inputs This is the price of factors of production that are used by producers Cost of inputs goes up the curve shifts left Cost of inputs goes down the curve shifts right.

Number of Sellers The change in the number of suppliers causes the market supply curve to shift to the left or right. More firms to the right… Less a shift to the left

Gov’t regulations Creation of new gov’t rules or laws When government establishes new regulations, the cost of production can be affected, causing a change in supply.

Graphic Organizer Make a fortune teller! 4 outside parts : COLORS 8 Inside Parts:: 1. Change in Quantity Supplied 2. S 3. T 4. E 5. P 6. I 7. N 8. G Then, lift the flap, write the answer or details 