Slide 1

Chapter 5 - Supply Slide 2 Section One What is Supply I.An Introduction to Supply i. Supply is the amount of a product that would be offered for sale at all possible prices that could prevail in the market ii. Law of Supply Suppliers will offer more for sale at higher prices a. The Supply Schedule i. This listing of the various quantities of a particular product supplies at all possible prices in the market. b. The Individual Supply Curve i. The graph showing various quantities supplied at each and every price that might prevail in a market. c. The Market Supply Curve i. The supply curve that shows the quantities offered at various prices by all firms that offer a product for sale in an individual market. Slide 3 II. Change in Quantity Supplied i. The amount producers bring to the market at any given price ii. a change in the amount for sale in response to a change in price (quantity) 1. A movement along the supply curve Slide 4 III. Change in Supply These make the entire curve move a. Cost of Inputs This could be either the cost of labor or cost of supplies to make the product b. Productivity If productivity increases (>Right). If productivity decreases the (Right) d. Taxes and Subsidies Businesses view taxes as costs. Increases costs will increase the cost of production (Right) Slide 5 e. Expectations If producers expect their product to increase in price they may withhold supply ( Right) f. Government Regulations Increased regulations increase cost, which will cause producers to lower the amount supplied ( Right) g. Number of Sellers If more sellers enter the market (>Right) If sellers leave the market (