Bell Work If demand is the quantity of a product that consumers are willing and able to purchase at various prices, what do you think supply is?

In Lak’ech by Luis Valdez Tu eres me otro yo Si te hago daño a ti, Me hago daño a mi mismo Si te amo y respeto Me amo y respeto yo You are my other me If I do harm to you, I do harm to myself If I love and respect you I love and respect myself

Bell Work If demand is the quantity of a product that consumers are willing and able to purchase at various prices, what do you think supply is?

Chapter 4 Quiz Statistics 2 3 4 5 6 Total A 9 11 16 B 7 49 C 8 13 21 D 1 32 F 12 Avg 81.4 81 78.6 69.4 69 75.8

Consider the term marginal utility Consider the term marginal utility. Which word is the best synonym for marginal? useful borderline satisfactory additional

A change in quantity demanded is represented by movement along the demand curve. substitution. a shift of the demand curve. complements.

Which term refers to a change in price that causes a proportional change in total revenue? elastic inelastic unit elastic total expenditures

Supply What are the basic differences between supply and demand? Why is the production function useful for making business decisions? How do companies determine the most profitable way to operate?

An Introduction to Supply Supply is the amount of a product offered for sale at all possible prices in a market. The Law of Supply states that more product will be offered for sale at higher prices than at lower prices. Normal individual supply curves have a positive slope that goes up from left to right; if price goes up, quantity supplied goes up as well. The market supply curve is similar to the individual supply curve, except that it shows the quantities offered by all producers in a given market. Change in quantity supplied refers to a change in the quantity of a product offered for sale in direct response to a change in price.

Change in Supply Whereas a change in quantity supplied occurs only when prices change, a change in supply occurs when quantities change even though price remains constant. Factors that can cause a change in supply include cost of resources, productivity, technology, taxes, subsidies, government regulations, number of sellers, and expectations.

Supply https://www.youtube.com/watch?v=ewPNugI qCUM

Like demand, supply can be elastic, inelastic, or unit elastic. Elasticity of Supply Supply elasticity is a measure of the degree to which the quantity supplied responds to a change in price. Like demand, supply can be elastic, inelastic, or unit elastic. Production considerations alone determine supply elasticity. If a firm can adjust to new prices quickly, then supply is likely to be elastic. If adjustments take much longer, then supply is likely to be inelastic.

What happens to supply if the price of the product falls? Reflection What happens to supply if the price of the product falls?

What is a factor that can cause a shift in demand? Bell Work What is a factor that can cause a shift in demand?

In Lak’ech by Luis Valdez Tu eres me otro yo Si te hago daño a ti, Me hago daño a mi mismo Si te amo y respeto Me amo y respeto yo You are my other me If I do harm to you, I do harm to myself If I love and respect you I love and respect myself

What is a factor that can cause a shift in demand? Bell Work What is a factor that can cause a shift in demand?

ACME Paper Chain Company

The Production Function The production function is a graph or figure that shows how a change in one production variable affects total output. Production can be analyzed in terms of short-run or long-run relationships between inputs and outputs. Marginal product is the extra output or change in total product caused by adding one more unit of input.

Diminishing Marginal Returns https://www.youtube.com/watch?v=xLSRMt- wWAM

Marginal product changes as more workers are added. Stages of Production Marginal product changes as more workers are added. In Stage I of the production function, the marginal product increases with each additional worker. Stage II of the production function operates on the principle of diminishing returns; marginal products are still positive, but decrease steadily. In Stage III of the production function, the company has hired too many workers, and they interfere with one another and with production, causing marginal product to become negative.

Costs of Production https://www.youtube.com/watch?v=UWImfFa x8Ew

Total cost is the sum of fixed and variable costs. (TC=FC+VC) Finding Marginal Cost The costs that an organization incurs even when there is little or no activity are fixed costs, or overhead. Variable costs are usually associated with labor and raw materials and change with the business’s rate of operation or output. Total cost is the sum of fixed and variable costs. (TC=FC+VC) Marginal cost is the extra cost incurred to produce one more unit of output. (∆VC/MP)

Total revenue is all of the revenue a business receives. (TR=TPxP) Finding Marginal Revenue Average revenue is the average price of every unit of output. (AR=TR/TP) Total revenue is all of the revenue a business receives. (TR=TPxP) Marginal revenue is the extra revenue a business receives from the production and sale of one additional unit of output. (MR=∆TR/MP) Marginal revenue is the most important measure of revenue.

Profitability is affected by both costs and revenue. Profit Maximization and Break-Even Profitability is affected by both costs and revenue. The profit-maximizing quantity of output is the volume of production where marginal cost and marginal revenue are equal. The break-even point is the level of production that generates just enough revenue to cover total operating costs. The Internet is one of the fastest-growing areas of business today. E-commerce has much lower overhead and does not require as much inventory as traditional retail stores, so the break-even point of sales is much lower.

Chapter 5 Review/Practice Answer questions 1-12 on p. 149 For extra credit answer questions 13-15 and 19-22