2.  Supply: is a relationship between a product’s price and quantity supplied is shown using a schedule or curve  The law of supply states there is a direct relationship between price and quantity supplied.

3. Market Supply Schedule for Strawberries Quantity Supplied (millions of kg) Points on graph Price ($ per kg) $1.50 2.00 2.50 9 5 13 e d f Market Supply Curve for Strawberries S f e d 013 5 7 9 1113 Quantity Supplied (millions of kg per year) Price ($ per kg) 0.50 1.00 1.50 2.00 2.50

4.  Changes in supply: are shown by shifts in the supply curve are caused by changes in supply determinants This is when price remains unchanged, the supply for the item changes Supply changes due to other factors besides price of that item This is when producers supply more at each possible price

5. Market Supply Schedule for Strawberries Quantity Supplied (millions of kg) Price ($ per kg) $2.50 2.00 1.50 11 7 9 13 15 3 5 7 S0S0 S1S1 S2S2 Market Supply Curve for Strawberries 013 5 7 9 1113 Quantity Supplied (millions of kg per year) Price ($ per kg) 0.50 1.00 1.50 2.00 2.50 15 (S 2 ) (S 0 ) (S 1 )

6.  Supply determinants include the following factors: Number of producers (an increase causes a rightward supply shift)  An increase number of Internet providers increases the supply of such service Resource prices (an increase causes a leftward supply shift)  An increase in the prices of iron ore will increase the cost of producing steel and reduce its supply  A decrease in prices of seed and fertilizers will increase the supply of corn

7. State of technology (an improvement causes a rightward supply shift)  The development of fuel efficient engines reduced the cost of providing air service; the supply of # of flights increases Prices of related products  If tablets are more profitable, producers will switch from producing desktop computers to tablets  Higher profits from soccer balls entice producers to increase its supply and decrease the supply of volleyballs

8. Changes in nature (an improvement causes a rightward shift for some products)  A fire destroys forests, decreasing the supply of lumber Producer expectations (an expectation of lower prices in the future causes an immediate rightward supply shift)  Producers expect the computer prices (selling price) to decrease next year, causing them to supply more of this item now

9.  Changes in quantity supplied: are shown by movements along the supply curve are caused by price changes

10. 0 1 2 Quantity Supplied (millions of kg per year) Change in Quantity Supplied Price ($ per kg) 20 40 60 80 100 120 Change in Supply 0 1 2 Quantity Supplied (millions of kg per year) Price ($ per kg) 20 40 60 80 100 120 S0S0 S1S1 S0S0 b a

11. CHANGE IN QUANTITY SUPPLIED CHANGE IN SUPPLY  Movement from one point to another - from one price-quantity combination to another -on a fixed supply curve  Change in the entire schedule or the entire curve  A change in the quantity supplied of a good or service at every price