1. Supply
Chapter 5 Section 1

2. FYI
The energy crisis of the 1970s encouraged countries to look to nuclear reactors, fueled by uranium, as a new energy source. When public utility companies stockpiled uranium, uranium prices rose as they competed to get adequate supplies. Rising prices for uranium stimulated uranium exploration. Entrepreneur-explorers discovered deposits in Australia, Africa, and North America. Yet, slow expansion of nuclear power along with burgeoning stockpiles of uranium caused uranium prices to fall by the late 1980s to one eighth of the highest price offered ten years before.

3. I. An Introduction to Supply
Supply is the amount of a product that would be offered for sale at all possible prices in the market.
The Law of Supply states that suppliers will normally offer more for sale at high prices and less at lower prices.

4. A market supply curve illustrates the quantities and prices that all producers will offer in the market for any given product or service.

5. When the supply data is graphed, it forms a supply curve with an upward slope.

6. How do you explain that prices and quantities move in the same direction in a supply schedule?
Producers will produce high quantities at the highest prices and low quantities at the lowest prices.

7. II. Change in Quantity Supplied
A change in quantity supplied is the change in the amount offered for sale in response to a change in price.

8. What steps do you suppose a producer must go through in setting an introductory price for a product it brings to the market for the first time?

9. III. Change in Supply
A change in supply is when suppliers offer different amounts of products for sale at all possible prices in the market.

10. Factors that can cause a change in supply include:
the cost of inputs
productivity levels
technology
taxes or the level of subsidies
Expectations
government regulations.

11. Question Why does using new technology almost always increase supply?
It generally leads to greater efficiency, which lowers production costs, even though producers must initially train workers and adapt or create new production processes that accommodate the new technology.