The Law of Supply• Supply the amount

• Law of supply tendency of suppliers to offer

• Quantity supplied the amount a supplier is willing and

• As the price of a good rises, firms will produce

• If the price of a good falls, firms will produce

• If a firm is already earning a profit by selling a good, then an

• If the price of a good rises, but cost of making it remains the same,

– Producers would try to produce more of the good to

• Price goes up, you want to produce more and if the price goes down you want to produce less

Higher Production

Market Entry• Profit appeals to producers in the market

• Competition in the market is

• Rap music the ability to make money “rapping” has caused in increase in the amount of rap artists

The Supply Schedule• Supply schedule a chart that lists

• A Supply schedule shows only the

• A rise or fall in the price of a good will cause the quantity supplied to

• When a factor other than the price affects output,

Supply Graph and Elasticity of Supply• Supply curve a graph of the quantity supplied of a

good at different prices– Horizontal axis measures the

– Supply curves always rise from

• Market supply curve a graph of the quantity supplied of a good by

– **Helps determine total supply of a good at

• Elasticity of supply a measure of the way quantity supplied

• Elastic supply supply is

– Example: more pizza being produced at a higher price– A small increase in price has a

• Inelastic supply supply is

– Example: painting by a deceased artist• Key factor in determining elastic vs. inelastic supply

• Short run supply is

• Long-run supply is

Elasticity of Supply

Short Run Elasticity• Orange grove example

– If price goes up, planter could plant more trees, but he has

– His supply is inelastic because

– If price goes down, the planter will probably supply

• Orange Grove Example– Over time, you can plant more trees

– If the price drops and stays low, over time, the grower could

• Supply becomes more elastic if the

Long-Run Elasticity