Without this, demand would never become satisfied

Yes, it’s the world of

___1___

Supply is a bit more complicated than demand

It is the amount of a product offered for sale at all possible 2 in the market.

Yes, just like with Demand there is also a law.

The Law of Supply

Suppliers will normally offer more when prices are ___3___ and less when prices are ___4___.

Change in Quantity Supplied

A change in quantity supplied is the change in the amount offered for sale in response to a change in ____5____.

If prices fall too low what are the two options that a producer faces?

6 -They could _____ production.

7-They could _____ production.

When ___8____rise, then the supplier can step up production.

This is a win-win because the supplier is happy and so are the workers.

A change in supply is different than change in quantity supplied.

Change in supply occurs when suppliers offer different amounts of products for sale at all possible ____9____.

There are many factors that can cause a change in supply.

To the right is a list of those factors. You will need to tell me what they are. It’s almost like “Wheel of Fortune” but with less clapping.

Cost of In_ _ _ _ 10P_ _ d_ _ t _ _ _ _ y

level 11 _ e_ _ nolo_ _ 12_ ax_ _ 13Su_ s_d_ _ _ 14ExpectationsG_v_ _ _ _ e _ _

R_g_ _ation 15

And just like there is elasticity of demand there is also elasticity of supply.

With supply elasticity the only real consideration is production. If a firm can react quickly to price changes then there is ____16___. If it cannot then supply is ____17___.

Would a food processing firm be supply elastic? 18

Would the nuclear power industry be supply elastic? 19

Question 20

Which product is likely to have the most elastic supply curve?AutomobilesWashing machinesIce cream conesBridge building

Oh snap, it would have to be the _______.

The Theory of Production

There are three stages of production. Stage one is when each new worker hired has a positive impact.

Stage Two-Diminishing Returns

Each new hire has a positive impact on output but not at the same rate as stage 1.Stage 3-Too many workers result in negative returns.

Stage 1-increasing returns

Stage 2-diminishing returns

Stage 3-negative returns

Question 21-A company,therefore, that wants to maximize output wants

a. To always be in stage 3b. To always stay in stage 1c. To always stay in stage 2

Suppliers have to deal with cost of production

There are four basic types of cost. Which of the below is not one of them? (22)A. Elastic D. TotalB. Fixed E. MarginalC. Variable

Fixed Costs

Fixed costs occur even if there is no production.RentSalariesTaxes

Variable Costs

These costs vary with production:The cost of raw materialsHourly wagesTransportation

Total cost is simply adding fixed and variable costs.

The last term associated with cost is marginal cost. It is the extra cost incurred when a business produces one extra unit.This is important because ___23___ costs stay the same whether a business makes one widget or twenty.

For a business to survive it must break even.

Break even is when the total output equals the total cost. This occurs somewhere between Stages ___24___.Figuring out where this point is is called marginal analysis. It is a cost benefit decision that compares the extra benefits to the extra costs of an action.

Marginal Analysis-25

The goal of any business is to do what?

A.Hit the break even pointB.Employ as many workers as possibleC. Make as much product as possible,

even at a lossD. Reach the profit maximizing

quantity of output

Huge,huge hint:MR=MC Marginal Revenue=Marginal Cost