CHAPTER 5 Jeannette Suarez. Melissa Velazquez. Victor Feria. Rafael Medina. Kevin Sobalvarro. Ximena Lopez. Period 5. 3/25/11.

Section 1 Section 1

The Law Of Supply Basically the higher the price, the more of the product gets produced. Basically the higher the price, the more of the product gets produced. Since the price goes up the consumer must want the goods more so its produced quicker Since the price goes up the consumer must want the goods more so its produced quicker

Market Entry Market entry means when something at the moment is hot and is making a lot of revenue other markets or business joins that market because they understand is doing really good and making its profit. Market entry means when something at the moment is hot and is making a lot of revenue other markets or business joins that market because they understand is doing really good and making its profit.

The Supply Schedule The schedule shows an even amount of price range it gets higher and then the production of it. The schedule shows an even amount of price range it gets higher and then the production of it. Prices per slice of pizza Slices supplied per day $ $ $

Supply Graph * The supply graph Supply schedule get recorded, which creates a supply cure it s like a demand curve. But it measures the quantity of the good with the horizontal axis. Supply schedule get recorded, which creates a supply cure it s like a demand curve. But it measures the quantity of the good with the horizontal axis. A market supply curve is to curve the difference in two with two curves. It also shows how different suppliers with the same good with all different prices. A market supply curve is to curve the difference in two with two curves. It also shows how different suppliers with the same good with all different prices.

Supply and Elasticity Elasticity measures how consumers will react to a change in a price. Elasticity measures how consumers will react to a change in a price. Elasticity of supply is based on the same concept, it’s the measure of the way suppliers respond to change in price. Elasticity of supply is based on the same concept, it’s the measure of the way suppliers respond to change in price. Elasticity of supply tells how firms will respond to changes in the price of a good. Elasticity of supply tells how firms will respond to changes in the price of a good. Example the change in gas. Example the change in gas.

Elasticity of supply and time Elasticity of supply in the short run In a short run, supply is inelastic whether the price increases or decreases. When supply is elastic a small amount increases in price as a big effect on supply. An example can be when cotton farms cannot respond so fast to the increase of price with soybeans because of the time it takes to produce the cotton

Elasticity in the long run A supply can become more elastic over time. Just like a demand, supplies can become more elastic if the supplier has a long time to respond to a price change. Just like a demand, supplies can become more elastic if the supplier has a long time to respond to a price change.

Section 2

Labor and output The main question that an owner of a business has is how many people to hire for its business. The main question that an owner of a business has is how many people to hire for its business. The more people hired the more production is made by the company. The more people hired the more production is made by the company.

Marginal product of labor The marginal product of labor is the total output that hiring one more worker gives you. The marginal product of labor is the total output that hiring one more worker gives you.

Increasing marginal returns Increasing marginal returns is when you hire someone to specialize in something and it increases the production because there’s no time wasted switching tasks. Increasing marginal returns is when you hire someone to specialize in something and it increases the production because there’s no time wasted switching tasks.

Diminishing marginal returns. This is when you start hiring too many people the production starts to decrease. This is when you start hiring too many people the production starts to decrease.

Companies Objective A companies main objective behind all company decisions is how to maximize profits. A companies main objective behind all company decisions is how to maximize profits. Profits-total money made minus the total costs Profits-total money made minus the total costs

Profit The profit made is dependent on how much of a product the company makes and also how much they sell the particular product for The profit made is dependent on how much of a product the company makes and also how much they sell the particular product for Companies strive to find a level of output where they will end up making the most profit Companies strive to find a level of output where they will end up making the most profit

Marginal Cost Additional income for selling one more unit of a good. Additional income for selling one more unit of a good. Good way to find the best level of output. Good way to find the best level of output. The best level of output is when the marginal revenue is the same as marginal cost. The best level of output is when the marginal revenue is the same as marginal cost.

Production When the price of something rises companies strive to increase production of that product. When the price of something rises companies strive to increase production of that product. This is to maximize profits and an example of law of supply. This is to maximize profits and an example of law of supply.

Operating Cost The cost of operating a facility. It includes variable costs but not fixed costs. The cost of operating a facility. It includes variable costs but not fixed costs. Fixed costs exist whether the factory is open or not. Fixed costs exist whether the factory is open or not. There are times when keeping a money losing factory open is the best choice. There are times when keeping a money losing factory open is the best choice.

Section 3

Input Cost: *Some factors can affect the price levels. *Any materials, machinery, or labor use to make a good will affect supply if the cost is changed. Effect of rising cost: * A supplier sets output where price is equal to marginal cost. *Marginal cost includes the cost of the production. *If the marginal costs rise the less profitable it can be. *If a firm can’t control the price, the production is cut until it’s equal.

Technology: * Technology can lower production costs in industries. * Robots and computers can replace workers and therefore makes the workers get lower salaries. * Technology lowers costs and increase supply at all price levels. Government Influence on supply: Government Influence on supply: * Government has the power to affect the supplies of many goods by: -Raising the cost -Raising the cost - Lowering the cost - Lowering the costSubsidies: *Subsidy: is a government payment that supports a business or market. *Government often pays a producer a set subsidy for the goods produced. * Some countries an their government have their reasons for subsidizing producers. For example;

-Europe: Food shortage during WWII -France: Farms, to protect the lifestyle and character. *Government subsidizes manufacturers to protect young, grown industries from strong foreign competition. Taxes: Taxes: *Excise tax- a tax on the production or sale of a good. *Increases production costs and adds an extra cost. *Excise taxes can sometimes discourage the government thinks are harmful. Regulation: *Regulation- government intervention in a market that affects the production of a good. *Some regulations can increase the cost of manufacturing cars and reduce the supply. It can shift to the left.

Sources * Economics book * =Search+Images&gbv=2&aq=f&aqi=&aql=&oq= *