The Law of Supply SSEMI2a: Define the law of supply SSEMI3a: Identify and illustrate on a graph a shift in supply

Price is high, supply is high Price is high, supply is high. With supply: think like a producer (as opposed to demand—we think like consumers)

The Law of Supply According to the law of supply, suppliers will offer more of a good at a higher price. Price As price increases… Supply Quantity supplied increases Price As price falls… Supply Quantity supplied falls

This is because: Will produce more for a higher price More incentive to get in the market and produce

Supply Schedules How much of a good suppliers will offer at different prices Price Quantity Supplied $0.50 50 $1.00 100 $1.50 150 $2.00 200 $2.50 250

Supply curve

Price per slice of pizza Slices supplied per day Supply Schedules A market supply schedule is a chart that lists how much of a good all suppliers will offer at different prices. $.50 1,000 Price per slice of pizza Slices supplied per day Market Supply Schedule $1.00 1,500 $1.50 2,000 $2.00 2,500 $2.50 3,000 $3.00 3,500

Output (slices per day) Supply Curves Market Supply Curve Price (in dollars) Output (slices per day) 3.00 2.50 2.00 1.50 1.00 .50 500 1000 1500 2000 2500 3000 3500 A market supply curve is a graph of the quantity supplied of a good by all suppliers at different prices. Supply

Elasticity of Supply Elasticity of supply is a measure of the way quantity supplied reacts to a change in price. If supply is not very responsive to changes in price, it is considered inelastic. An elastic supply is very sensitive to changes in price.

Shifts in supply Inputs Technology Government: 3 things Global economy Future Prices Number of suppliers

GOOD Inputs *example and illustrate on a graph Technology *example and illustrate on graph Future expectations of prices Number of Suppliers Global Economy Government: subsidies Government: Taxes