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Supply Chapter 5. An Introduction to Supply  Supply – schedule of quantities that are offered for sale at each and every price  What suppliers will.

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Presentation on theme: "Supply Chapter 5. An Introduction to Supply  Supply – schedule of quantities that are offered for sale at each and every price  What suppliers will."— Presentation transcript:

1 Supply Chapter 5

2 An Introduction to Supply  Supply – schedule of quantities that are offered for sale at each and every price  What suppliers will supply  Anyone offering products to sell is a supplier  A person looking for a job is supplying their labor

3 Supply and the Supply Schedule  Supply schedule – data in a table format  Supply curve – data on a graph  Curve is opposite of demand  Law of Supply  Quantity supplied varies directly with its price  Change in Quantity Supplied  Quantity supplied – amount producers bring to market at one price  Change in quantity supplied – change in amount offered in response to a price change  Movement along the supply curve

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5 Change in Supply  Producers offer different amounts of products at every price level  Shift in the supply curve  Reasons:  Cost of Inputs  Productivity  Technology  Number of Sellers  Taxes and Subsidies  Expectations – anticipation of future events  Government Regulations

6 Elasticity of Supply  Small change in price = large change in quantity supplied – elastic  Big change in price = small change in quantity supplied – inelastic  Proportional changes – unit elastic

7 Elasticity of Supply  Determinants of Supply Elasticity  Products requiring large amounts of capital to produce are generally inelastic  Crude oil  Products needing smaller amounts of capital are elastic  Candy, kites  Comparing Demand and Supply Elasticity  Very similar


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