1. Agenda
1. Warm-Up
2. Discuss the Law of Supply and Supply Schedule/Curve
3. Application of Law of Supply (graphing)

2. Warm Up
Explain one factor that affects the elasticity of a good or service.
Give an example of a good that has a highly elastic demand. Give an example of a good that has a highly inelastic demand.

3. Law of Supply Law of Supply: Supply
The lower the price, the lower quantity supplied
The higher the price, the higher quantity supplied
Role of profit
Supply
How much producers are willing and able to produce in a given amount of time
Everything else remaining equal

4. Role of Profit Profit = total revenue - total cost.
Total revenue is the amount of $$$ received from consumers for a certain time period.
Total cost includes the cost of all resources used by a firm in producing goods or services.
Over time, total revenue must cover total cost for the firm to survive.

5. Supply Schedule $15 28 12 24 9 20 6 16 3 12 Price Quantity Supplied
per Pizza per Week (millions)
$15 28
12 24
9 20
6 16
3 12

6. Supply Curve 12 16 20 24 28 Millions of pizzas per week $15 9 6 3
Price per pizza S

7. More Willing to Supply
As a price increases, a producer becomes more willing to supply the good.
Prices act as signals to suppliers about the rewards for producing various goods.
A higher price makes production more profitable and attracts resources from lower- valued uses.

8. Supply Versus Quantity Supplied
Supply is the entire curve.
Quantity supplied refers to a particular point on the curve.

9. More Able to Supply
Higher prices also increase the producer’s ability to supply the good
A higher price makes producers more able to increase quantity supplied.
Individual supply—the supply of an individual producer
Market supply—the supply of all producers in the market
Market supply curve

10. Summing Individual Supply Curves to Find the Market Supply Curve