WHAT IS SUPPLY?

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1-What is “supply’?

The amount of a product offered for sale at all possible prices in the market.

2-Explain the “Law of Supply”Suppliers will normally offer more [quantity] for sale at high prices and less [quantity] at lower prices.

Suppliers have an incentive to produce more at higher prices in hope of huge profits

3-How is the Law of Supply different from the Law of Demand?Supply*From the producer’s P.O.V.

*The higher the price, the greater the quantity supplied and vice versa.

*The supply curve slopes upward from left to right

3-How is the Law of Supply different from the Law of Demand?Demand*From the consumer’s P.O.V.

*The lower the price, the greater the quantity demanded and vice versa.

*The demand curve slopes downward from left to right

https://www.youtube.com/watch?v=nKvrbOq1OfI

 4-What is a supply schedule?

A listing of the various quantities supplied at all possible prices

 5-What is a supply curve?A graph showing the various quantities supplied at all possible prices in the market.

6-What is a “change in the quantity supplied”? What does this change respond to?

The amount offered for sale in response to a change in price.

 7-What is a “change in supply”? How is it different from a “change in the quantity supplied”?

Change in supply: something happens that causes suppliers to offer products at different amounts for sale at all possible prices.

•Curve shifts left [decrease of product supplied] or right [increase of product supplied]

Change in the quantity supplied: Just a movement up and down the supply curve. Just affected by price. Price changes quantity, but it does not affect supply

8-What happens when the supply curve shifts to the:*left: less is offered at all possible prices*right: more is offered at all possible prices

 9-Name and explain the 7 factors that determine whether supplies increase or decrease. 1-Cost of Resources-an increase or decrease in the cost of land, labor or capital will shift the curve left or right

2-Productivity-increases whenever more output is produced using the same amount of input [cost of resources]•Happy, motivated workers: increase in supply [rightward shift]

•Unhappy, unmotivated workers: decrease in supply [left] 

 9-Name and explain the 7 factors that determine whether supplies increase or decrease. 3-Technology-

New technology- shifts the curve rightward: lowers cost of production, labor-saving.

Technological breakdown- shifts curve left because of increased costs. 

 

 9-Name and explain the 7 factors that determine whether supplies increase or decrease. 4-Taxes and Subsidies:

Taxes: higher taxes raise the cost of production and supply decreases. Lower taxes: supply increases.

Subsidies: a government payment to an individual, business or other group. They lower the cost of production and increase supply.

Farmers are subsidized by the government

 

 9-Name and explain the 7 factors that determine whether supplies increase or decrease. 5-Expectations: About future prices going up, wait for the price increase and increase supply then. Rightward Shift

Future prices going down: Slow down or stop producing. Leftward Shift

6-Government Regulations

7-Number of Sellers 

 9-Name and explain the 7 factors that determine whether supplies increase or decrease.

6-Government Regulations: More regulations: Cause an increase in the cost of production and a decrease in supply: leftward shift

Fewer regulations: Cause a decrease in the cost of production and a increase in supply: leftward shift

7-Number of Sellers

More sellers: increase in supply and rightward shiftFewer sellers: decrease in supply and leftward shift