Chapter 5 Section 1

 Supply – the amount of goods available  Law of Supply ◦ Producers offer more of a good as its price increases and less as its price falls Law of Supply Price Supply

 Higher production = higher profit  Market Entry – more want in on the business ◦ Example – all the different pizza places in Avon

Price Per Slice of PizzaSlices Supplied Per Day $1100 $2150 $3200 $4250 $5300 $6350 Can You Graph This?

 Elasticity of Supply ◦ A measure of the way quantity supplied reacts to a change in price ◦ More than 1 = Elastic, Less than 1 = inelastic  Equal to 1 = Unitary Elastic

 Elasticity of Supply Depends on TIME ◦ Supply in the short run  Business have trouble adjusting to changes in price in the short term  Supply is inelastic ◦ Supply in the long run  Over time, adjusts are made  Supply is more elastic