1. Period 5 Daily Writing Prompt What does it mean when supply is elastic?

2. Essential Question How much of a good or service should a business produce?

3. Production Costs Fixed Cost – cost that does not change, no matter how much of a good is produced. – Ex. Rent, salaries, machine repairs

4. Production Costs Variable Costs – Costs that rise or fall depending on the quantity produced. – Ex. Electricity, heat Total costs = fixed costs

5. Check for Understanding Give an example of a fixed cost and a variable cost of a bakery.

6. Shifts in the Supply curve Decrease in Supply – price remains the same, but supply decreases

7. Price remains the same, but supply decreases

8. Government’s influence on supply Government can encourage or discourage production Subsidy – a government payment that supports a business or market. Excise tax – a tax on the production or sale of a good. – Examples?

9. Regulation – government intervention in a market that affects the price, quantity, or quality of a good. – Ex. Automobiles – pollution, MPG standards Government’s influence on supply

10. Future Expectations of Prices If suppliers expect prices to rise, they will store their goods. If suppliers expect prices to fall, they will place goods on the market immediately

11. Do Now Grab a textbook Answer questions 1-3 & 5 on pg. 120 ***Those absent yesterday can also work on Anticipation Guide***

12. Period 5 Daily Writing Prompt What is regulation?

13. Heads up again… Quiz tomorrow – Chapter 5, Section 1 FTF

14. Cablevision vs. FOX 1)What is the issue being discussed in this article? 2) How much money is FOX asking for? 3) What different incentives are present in this situation? 4) How could availability of substitutes influence demand in this situation? 5) Could the government intervene to solve this problem? 6) Who is to blame???