Do Now Activity List the names of as many bottled beverages as you can. 5 minutes Separate into groups of at least 4. There should be at least five groups. Confer and divide your list into categories. JClarke

Opening activity example: Beverage Price Container Type Sports or Health Drink Etc. JClarke

Objectives: Explain the law of supply. Interpret a supply schedule and supply graph. JClarke

Section 1 Understanding Supply Chapter 5: Supply Section 1 Understanding Supply JClarke

I. The law of supply JClarke

A. Supply Amount of goods available JClarke

B. Law of supply Producers offer more of a good as its price increases and less as its price falls. JClarke

1) Producer Also known as… Supplier, company, owner, and/or entrepreneur Basically it’s whomever supplies a product to the market. JClarke

2) Quantity supplied The amount of goods a producer is willing and able to sell at a specific price JClarke

C. Higher production The promise of higher revenues for each sale, encourages the firm to produce more. Search for profit drives decision to produce. “All about the Benjamins!” JClarke

D. Market entry Profits appeal both to producers already in the market and people who may decide to join the market. Rising prices draw new firms into the market. JClarke

II. The supply schedule Shows the relationship between price and quantity supplied, or how much a supplier will offer at various prices. Shows how ONLY the PRICE affects the output. JClarke

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A. A change in quantity supplied A rise or fall in price of a good will cause the quantity supplied to change, but not the supply schedule itself. If change is shown, a new row is added to show the change factor. JClarke

B. Market supply schedule All of the supply schedules of individual firms in a market. Show the relationship between prices and the total quantity supplied by all firms in a particular market. JClarke

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C. The Supply Graph JClarke

1) The supply Curve When the data points in the supply schedule are graphed, they create the supply curve. Horizontal axis (x) measures quantity of good supplied Always rises from the left to right. JClarke