1. Supply Curve

2. Supply - Defined  Supply: the quantity of goods and services that producers are willing to offer at various possible prices during a given time period.  Quantity Supplied: the amount of a good or service that a producer is willing to sell at each particular price.  ***On a Graph, Supply is the Curve itself, while Quantity Supplied is each individual point that make up the curve***

3. Law of Supply  Producers supply more goods and services when they can sell them at higher prices and fewer goods and services when they must sell them at lower prices.

4. Cost of Production  Wages and salaries, rent, interest on loans, bills for electricity, raw materials, and any other goods and services used to manufacture a product.

5. Elastic & Inelastic Supply  Elastic Supply: When a small change in price causes a major change in the quantity supplied.  They can be made quickly, inexpensively using few resources (T-shirts, mugs, pens…)  Inelastic Supply: When a change in a good’s price has little impact on the quantity supplied.  These items require a lot of Time, Money and Scarce resources. (Gold, Housing, Airplanes)

6. Determinants of Supply:  Factors, OTHER THAN PRICE that can shift the supply curve left or right.  1. Input Prices: The lower the cost of production, the more a producer is willing to produce.

7. Determinants of Supply:  Input Prices (Government Tools)  Taxes – Higher taxes = Supply curve shifts to the left.  Subsidies – Government Aid to certain Types of Businesses. (Farmers)  Regulation – Government regulations cause higher costs of production.

8. Determinants of Supply:  3. New Technology – New ways to produce a good.  4. Competition – The more competitors in a market, the higher the supply.  5. Prices of Related Goods – Suppliers in a particular field are more likely to supply a higher priced good.  6. Producer Expectations