Transcript Supply Notes

Supply!
What is supply?
 Like demand it needs BOTH willingness & ability!
 Supply is the willingness AND ability to provide a
product
You sell TV’s
 You sell 10 flat screen TVs a
day for $800 each
 The price INCREASES to
$1,000
 What would you like to do
now?
 You will want to SUPPLY
more TVs
Law of Supply
 As the price of product
increases, the quantity
supplied will increase
 As the price of a product
decreases, the quantity
decreases as well
 Law of Supply
 If P↑then Qs↑
If P↓ then Qs↓
(where P = price and Qs =
quantity supplied)
Supply Schedule & Curve
Supply Shifts
Why would supply shift?
 Resource prices
 Labor, land, capital
 Technology
 You can produce MORE for less
 Taxes
 You produce basketballs; each one is taxes $4; you will
supply LESS basketballs
 Subsidies
 US pays farmers $2 for every bushel of corn they
produce; so they produce more!