Economics Unit 4 Supply
Supply refers to the various quantities of a good or service that producers are willing to sell at all possible market prices The Law of Supply is the principle that suppliers will normally offer more for sale at higher prices and less at lower prices
Supply A supply schedule is a table showing quantities supplied at different possible prices. A supply curve is a graph showing the quantities supplied at each possible price. Market Supply describes the combination of supply schedules for all businesses that provide the same good or service
Elasticity A product for which quantity changes a great deal when prices go up or down is said to be supply elastic Supply elasticity measures how the quantity supplied changes in response to price changes. A product for which quantity changes very little when prices go up or down is said to be supply inelastic
Products and Profits Price helps answer what to produce, how to produce, and for whom to produce. A shortage is the amount by which the quantity demanded is higher than the quantity supplied.
Products and Profits Price ceiling refers to the government-set maximum price that can be charged for goods and services A surplus is the amount by which the quantity supplied is higher than the quantity demanded.
Products and Profits Profit is the money a business receives for its products or services over and above its costs. Productivity is the degree to which resources are used efficiently to produce goods and services. Technology refers to the methods or processes used to make goods and services
Government Interaction Higher taxes mean higher costs, which cause a decrease in supply. In general, when government regulations get tighter, supply is restricted. Subsidy is the term for a government payment to an individual, business, or other group for certain actions
Supply and Demand A price floor is a government minimum price that can be charged for goods and services. The equilibrium price is the point at which there is neither a surplus nor a shortage.