Transcript Supply - USD 292

Supply
Chapter 5
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
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
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
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
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