How much stuff companies make Supply How much stuff companies make

supply Supply: the various quantities of a good or service that producers are willing to sell at all possible market prices. Suppliers offer different quantities of a product depending on the price buyers are willing to pay. Law of Supply: As the price rises for a good, the quantity supplied rises. Ex: If your bracelet business becomes profitable, you will want to make even more bracelets and therefore earn even more money. Incentive: something that motivates an individual to do something. $$$!

Measuring supply Supply Schedule: table showing how many items will be produced at a range of prices. Supply Curve: graph that shows the amount of a product that would be supplied at all possible prices in the market. Unlike with demand, price and quantity supplied are positively correlated.

Important stuff! Profit Motive: Companies try to set prices at a level that will cover their costs---otherwise they’ll lose money! Profit is the money a business receives for its products or services over and above its costs. Market Supply: The total amount of items producers will make for a certain price. This is found by adding together the supply schedules of all businesses that produce the good or service. Remember! Price is the only thing that changes the quantity supplied. Any other factors will cause the entire supply curve to shift.

Changes in supply curve The cost of resources If it costs less to make the item, you make more profit per item Productivity When workers are able to get more work done in the same amount of time Technology Improvements to the process of production. Ex: assembly line, new machines, automation Government Policies New safety requirements and regulations, increased minimum wage, etc.

Changes in supply curve Taxes Increase the cost of running a business Subsidies When the government pays a business for doing something. Ex: subsidized housing---the government will give landlords money if they rent to lower-income individuals at a discounted price. Incentive! Expectations If the iPhone 15 is coming out next month, companies will make fewer cases that fit the iPhone 8. They will start making more cases to fit the iPhone 15 instead. Number of Suppliers If 12 new companies start that make a certain item, the market supply for that item will increase. If half of those companies then shut down, the market supply will decrease.

Supply elasticity Supply Elasticity is how responsive the quantity supplied is to a change in price. Items that are quick and easy to make like trading cards and Little Debbie cakes have highly elastic supply. Items that are expensive, difficult, and time-consuming to produce like oil and rubies tend to be very inelastic.