Presentation is loading. Please wait.

Presentation is loading. Please wait.

Price Effect Market Supply Price Elasticity Change in Supply

Published byFlora Bailey Modified over 6 years ago

Similar presentations

Presentation on theme: "Price Effect Market Supply Price Elasticity Change in Supply"— Presentation transcript:

1 Price Effect Market Supply Price Elasticity Change in Supply

2 Supply The various amounts of something a producer is willing and able to sell at different prices at a given time General rule: Sell a lot at a high price Sell a little at low price

3 S Price Quantity

4 Law of Supply Other things equal, as price rises the quantity supplied rises Explanations: Revenue implications Marginal cost 3-4

5 Price Effect As price changes, quantity supplied changes
As each new quantity supplied is added, the marginal cost of production increases Thus, as quantity goes up, so does the price and vice versa Price Effect: price changes effect quantity changes

6 S Price Quantity

7 All suppliers of a given product included in the figures given
Market Supply The sum of all individual supplies in a given market at a particular time All suppliers of a given product included in the figures given

8 Change in Supply Change in supply results in quantity changes at all prices (a new line is drawn on the graph)

9 S1 S2 Price Quantity S1 to S2 = Increase in Supply

10 S2 S1 Price Quantity S1 to S2 = Decrease in Supply

11 Determinants of Supply
Resource prices Technology Taxes and subsidies Prices of other goods Substitutes & Compliments Producer expectations Number of sellers 3-11

12 Change in Quantity Supplied
Individual Supply Supply Can Increase or Decrease P 6 5 4 3 2 1 S3 Individual Supply S1 Change in Quantity Supplied S2 P Qs $5 4 3 2 1 60 50 35 20 5 Price (per bushel) Change in Supply Q Quantity Supplied (bushels per week) 3-12

13

14 Price Elasticity The degree in which price changes effect quantity supplied Small price changes that effect quantity supplied A LOT is elastic Small price changes that have little to no effect on quantity supplied is inelastic

15 Two Reasons for Elasticity:
Availability of Inputs Adjust for time Examples: Pizza: Elastic (availability of inputs) Flu Vaccine: Inelastic (adjust for time)

16 S Price Inelastic P2 Big Change P1 Q1 Q2 Quantity Small Change

17 Elastic Price S P2 Similar Change P1 Q1 Q2 Quantity Similar Change

Download ppt "Price Effect Market Supply Price Elasticity Change in Supply"

Similar presentations

Today’s Objectives – Day 10

Today’s Objectives – Day 10
Chapter 7 Supply & Demand

Chapter 7 Supply & Demand
Law of Supply and Elasticity of Supply Supply: the amount of goods available.

Law of Supply and Elasticity of Supply Supply: the amount of goods available.
Supply.  Demand is all about the buyer.  Supply is all about the seller.

Supply.  Demand is all about the buyer.  Supply is all about the seller.
Supply Chapter 5.

Supply Chapter 5.
200 300 400 500 100 200 300 400 500 100 200 300 400 500 100 200 300 400 500 100 200 300 400 500 100 SUPPLY 32nd33rd26th18th.

SUPPLY 32nd33rd26th18th.
Supply Notes. Quantity Supplied Is the quantity of a good or service producers are willing and able to sell at the particular price during a specified.

Supply Notes. Quantity Supplied Is the quantity of a good or service producers are willing and able to sell at the particular price during a specified.
Agenda 10/3/14 Warm Up: Diminishing Marginal Utility Law of Supply Lecture – Guided Notes Supply Practice Remember Market Watch #2 is due Monday!

Agenda 10/3/14 Warm Up: Diminishing Marginal Utility Law of Supply Lecture – Guided Notes Supply Practice Remember Market Watch #2 is due Monday!
Unit Three ECONOMICS DemandandSupply. PA Standards 6.2.12E; 6.2.12.G; 6.3.12.D; 6.3.12.E; 6.3.12.F.

Unit Three ECONOMICS DemandandSupply. PA Standards E; G; D; E; F.
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.

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.
Supply Warm Up: What is a good you can LEAST do without? How much do you pay now, and how much would you be willing to pay for it before you stop using.

Supply Warm Up: What is a good you can LEAST do without? How much do you pay now, and how much would you be willing to pay for it before you stop using.
SUPPLY Quantity supplied is the amount of a good that sellers are willing and able to sell. Law of Supply The law of supply states that, other things equal,

SUPPLY Quantity supplied is the amount of a good that sellers are willing and able to sell. Law of Supply The law of supply states that, other things equal,
Chapter 5 Supply.

Chapter 5 Supply.
1 Essential Question: Explain why supply is considered to be “producer” controlled, describe the relationship between supply and price according to the.

1 Essential Question: Explain why supply is considered to be “producer” controlled, describe the relationship between supply and price according to the.
Supply.

Supply.
Chapter 5 Supply. Section 1 What is Supply ? The Law of Supply Supply refers to the willingness and ability of producers to offer goods and services.

Chapter 5 Supply. Section 1 What is Supply ? The Law of Supply Supply refers to the willingness and ability of producers to offer goods and services.
Supply Chapter 5. An Introduction to Supply  Supply – schedule of quantities that are offered for sale at each and every price  What suppliers will.

Supply Chapter 5. An Introduction to Supply  Supply – schedule of quantities that are offered for sale at each and every price  What suppliers will.
Supply (The Business Point of View) Another Key Economic Concept.

Supply (The Business Point of View) Another Key Economic Concept.
Supply Chapter 4 Price Effect Market Supply Price Elasticity Change in Supply.

Supply Chapter 4 Price Effect Market Supply Price Elasticity Change in Supply.
Supply Curve. Supply - Defined  Supply: the quantity of goods and services that producers are willing to offer at various possible prices during a given.

Supply Curve. Supply - Defined  Supply: the quantity of goods and services that producers are willing to offer at various possible prices during a given.

Similar presentations

Ads by Google