1. The theory of supply
The amount producers are able and willing to offer for sale at a given price over a period of time.

2. Price per pair of socks (£) Quantity Supplied (1st Quarter)
The supply schedule for Soneji’s Super Socks The amount producers are able and willing to offer for sale at a given price over a period of time
Price per pair of socks (£)
Quantity Supplied (1st Quarter) 1
1.50 2 10
2.50 15 3 20
3.50 25 4 30
4.50 35 5 40
5.50 45 6 50

3. The laws of supply As price rises, supply will rise.
As price falls, supply will fall.
The supply curve slopes upwards from left to right.
Price (p) s
Quantity suuply (Qs)

4. Movements along the supply curve (an extension in supply)
Movements along the supply curve are caused by a change in price.
An extension in supply is brought about by a rise in price.
Manufacturers are willing to supply more as a greater profit can be made at the new price. p s
extension in supply p2 p1 Qs
Qs1
Qs2

5. Movements along the supply curve (a contraction in supply)
Movements along the supply curve are caused by a change in price.
A contraction in supply is brought about by a rise in price.
Manufacturers will cut supply as less profit is made at the new price. p s
contraction in supply p1 p2 Qs
Qs2
Qs1

6. Shifts in the supply curve
The determinants of supply are forces behind market supply.
A change in any one of these will affect market supply .
Any changes in the determinants of supply will cause the entire supply curve to shift across.
positive change in the determinants of supply will cause the supply curve to shift across to the right.
A negative change in the determinants of supply will cause the supply curve to shift across to the left.

7. The determinants of supply
A change in factor prices.
A change in the availability of raw materials.
A change in technology.
A change in the number of firms in the market .
A change in government legislation.

8. Price per pair of socks (£)
The supply schedule for Soneji’s Super Socks The amount producers are able and willing to offer for sale at a given price over a period of time
Price per pair of socks (£)
Quantity supplied
(1st Quarter)
(2nd Quarter) 1
1.50 2 10 20
2.50 15 25 3 30
3.50 35 4 40
4.50 45 5 50
5.50 55 6 60

9. A positive change in the determinants of supply
A fall in factor prices.
An improvement or new resource
An improvement in technology.
A reduction in the number of firms in the market .
A change in government legislation in favour of the business.
More is supplied at each price p s1 s2 p1 Qs
qs1
qs2

10. Price per pair of socks (£)
The supply schedule for Soneji’s Super Socks The amount producers are able and willing to offer for sale at a given price over a period of time
Price per pair of socks (£)
Quantity supplied
(2nd Quarter)
(3rd Quarter) 1
1.50 2 20 10
2.50 25 15 3 30
3.50 35 4 40
4.50 45 5 50
5.50 55 6 60

11. A negative change in the determinants of supply
A rise in factor prices.
A reduction or loss of a resource.
Technology ?
An increase in the number of firms in the market .
A change in government legislation in against the business.
Less is supplied at each price p s2 s1 p1 Qs
qs2
qs1

12. The total supply of all goods and services in an economy.
Aggregate supply
The total supply of all goods and services in an economy.