1. CH. 7 Section 1 Supply

2. People produce g/s to gain benefits, whether it is money income or psychic income. People produce g/s to gain benefits, whether it is money income or psychic income. Supply is from the PRODUCERS prospective! Supply is from the PRODUCERS prospective! Suppliers want to sell their products for the most money possible in order to get the highest profit possible. Suppliers want to sell their products for the most money possible in order to get the highest profit possible.

3. Supply = the quantities of a product or service that a firm is willing and able to produce for sale at different prices. Supply = the quantities of a product or service that a firm is willing and able to produce for sale at different prices. [Demand is from the buyers perspective] [Demand is from the buyers perspective] [Supply is from the sellers perspective] [Supply is from the sellers perspective]

4. Supply Schedule = a table that shows the relationship between P and QS of a g/s. Supply Schedule = a table that shows the relationship between P and QS of a g/s. PQ $1100 $2200 $3300 $4400

5. Supply Curve = graphic illustration of a supply schedule Supply Curve = graphic illustration of a supply schedule (EX: on overhead—include in notes)

6. Market Supply = the total quantity of a product or service that all firms in a mkt. will make available for sale at various prices Market Supply = the total quantity of a product or service that all firms in a mkt. will make available for sale at various prices =add up all quantities that each firm in the mkt would supply at each price (overhead for ex. include in your notes)

7. Law of Supply Law of Supply Change in QS Change in QS Price Elasticity of Supply Price Elasticity of Supply

8. Change in Supply (ΔS)= a change in the number of units supplied at every price. Change in Supply (ΔS)= a change in the number of units supplied at every price. [graph together on overhead] Cause for a change in supply= Cause for a change in supply= Number of Factors, such as: 1. Change in Technology 2. Change in the Cost of inputs

9. EX: a technological change can increase productivity and lowers the cost, which may allow firms to sell 650 units at $2 instead of 600. EX: a technological change can increase productivity and lowers the cost, which may allow firms to sell 650 units at $2 instead of 600. A change in the cost of inputs may cause a loss for the firm. If the cost of labor goes up, or raw materials, or higher energy costs=all increase cost of production. A change in the cost of inputs may cause a loss for the firm. If the cost of labor goes up, or raw materials, or higher energy costs=all increase cost of production.