Download Understanding supply

UNDERSTANDING SUPPLY
Chapter 21.3
Demand Review
 Log on to www.socrative.com and
join room 917563
 Take quiz.
 You may use pp. 70-71 to help you on
the quiz.
 Put your Chrome book or electronic
device away when done.
Supply
 Supply is the amount producers are willing to
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sell at all prices.
Producers control supply-side of our economy.
What is the difference between a supply
schedule & a supply curve?
Which way does the supply curve always slope?
Why?
The Law of Supply says as prices increase the
quantity supplied increases.
Do Supply Graphing Exercises, p. 73.
Supply
 How does profit motive relate to the law
of supply?
 Higher prices mean more profit
 Market supply is the amount of a product
that all producers are willing to sell at all
prices.
 Factors business consider include costs,
competition, and consumer demand
when businesses set prices.
Factors that change Supply
 Change in cost of resources: Cost of sugar (ex)
 Change in productivity: Labor slowdowns (ex)
 Change in technology: Check out scanners (ex)
 Change in government policies
 Taxes
 Minimum wage
 Subsidies
 Change in expectations: Hurricane season (ex)
 Change in the number of suppliers or competition
 Border Station vs. Southland
 Food Lion
Elasticity of Supply
 Elastic supply means there is a great
difference between quantity supplied and
changes in price.
 Lots of competition, substitutes causes
elasticity (Gas stations in Moyock, ex)
 Inelastic supply means quantity supplied
varies little with changes in prices.
 Usually lack of competition or substitutes
cases inelasticity. (Food Lion, ex)
Assignment
 Read chapter 21.4 and complete
the setting prices questions for p.
72.
 Due tomorrow!