Standard SSEMI2 a. Define the Law of Supply and the Law of Demand.

Supply Price Quantity Supplied Supply is the amount of product offered for sale at all possible prices Law of Supply: the principal that suppliers will normally offer more for sale at high prices and less at lower prices Price Law Of Quantity Supplied Supply

Supply Schedule Price Quantity Supplied List of the various quantities of a particular product supplied at all possible prices in the market. Quantity Supplied Price

Supply Curve Price Quantity Supplied A graph showing the various quantities supplied at each and every price that might prevail in the market. Price Law of Supply Quantity Supplied

Supply Curve Price Quantity Supplied

Standard SSEMI3a- Identify and illustrate on a graph factors that cause changes in market supply

Change in Quantity Supply Quantity Supplied: the amount producers bring to the market at a given price Change in quantity supplied: the change in the amount offered for sale in response to a change in price A CHANGE IN QUANTITY SUPPLIED DOES NOT MOVE THE CURVE!!!!!!!!!!!!!!!!!!!!!!!!!!

Change In Supply A situation where suppliers offer different amounts of products for sale at possible prices in the market

Cost of Inputs This is the price of factors of production that are used by producers Cost of inputs goes up the curve shifts left Cost of inputs goes down the curve shifts right.

Productivity This is how efficient workers are. More efficient the more the supply curve will move to the right.

Technology New inventions or innovation It affects the production cost. New technology moves the curve right.

Subsidies and taxes Firms view taxes as costs which causes the cost of production to increase, moving the curve to the left. Subsidy: a government payment to an individual, business, or other group to encourage or protect a certain type of economic activity

Expectations Producers think if the price of their product will go up, they may withhold some of the supply.

Gov’t regulations Creation of new gov’t rules or laws When government establishes new regulations, the cost of production can be affected, causing a change in supply.

Number of Sellers The change in the number of suppliers causes the market supply curve to shift to the left or right. More firms to the right… Less a shift to the left