1. Supply

2. Law of Supply
Suppliers will normally offer more for sale at high prices and less at lower prices
WHY???

3. Supply Schedule The Supply Schedule is similar to the demand schedule:
Price
Quantity Supplied 30 9 25 8 20 7 15 5 10 3 2
Notice, though, that as price decreases, so does the quantity supplied

4. Supply Curve To obtain a supply curve, graph the Supply Schedule:
Price
Quantity Supplied 30 9 25 8 20 7 15 5 10 3 2

5. Greebe in his natural habitat
Pretty Easy, Right?
You Try It:
Graph the supply schedule for Greebes:
Price
Quantity Supplied
100 25 80 20 60 15 40 10 5
Greebe in his natural habitat

6. Law of Supply
The Law of Supply is the principle that suppliers will normally offer more for sale at high prices and less for sale at low prices.
More simply, when someone sells stuff, he or she is trying to get the most amount of money for it.

7. Supply Curves Supply curves have a positive slope
If the price of a product rises or falls, we have a CHANGE IN QUANTITY SUPPLIED(sound familiar?)
Factors other than price cause a SHIFT IN SUPPLY

8. Determinants of Supply
Cost of Inputs
Productivity
Technology
Taxes & Subsidies
Expectations
Government Regulations
Number of Sellers
HOW DO EACH OF THESE FACTORS DETERMINE SUPPLY?

9. Change or Shift? Price of Greebes rises 40%
Change in Quantity Supplied
Factory workers at the Greebe factory go on strike for better wages
Shift in Supply (to the left/decrease)
Mr. Finstad retires and opens his own Greebe factory
Shift in Supply (to the right/increase)
Every newspaper prints a coupon for $10 off on the purchase of a Greebe

10. Elasticity of Supply
Just like a Demand Curve, a Supply Curve can also be elastic
The formula is the same:
Es = %∆Qs % ∆P
This will give you the slope of the supply curve
Es > 1: Elastic
Es = 1: Unit Elastic
Es < 1: Inelastic

11. Quick Check
Would McGrath’s Greebe Factory and Candy Warehouse rather charge $20 per Greebe or $40 per Greebe?
What would prevent MGF&CW from charging $200 per Greebe? Wouldn’t that make the most money?

12. Equilibrium Law of Supply ≠ Law of Demand Suppliers want high prices
Consumers want low prices
This is why we have Black Friday

13. Equilibrium (2)
If we plot a demand curve and a supply curve on the same graph, the point at which they meet is known as market equilibrium
At market equilibrium, we can determine both the equilibrium price and the equilibrium quantity of a product

14. You Try
Using your economics skills, determine the equilibrium price and quantity for Greebes.
Demand Schedule
Supply Schedule
Price
Quantity Demanded
100 5 80 15 60 25 40 35 20 45 55
Price
Quantity Supplied
100 25 80 20 60 15 40 10 5

15. What Do You Get?
Price
Quantity