KW_Macro_Ch_03_Sec_02_Supply_Curve

KW_Macro_Ch_03_Sec_02_Supply_Curve - chapter 3 > Supply...

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>> Supply and Demand Section 2: The Supply Curve chapter 3 Ticket scalpers have to acquire the tickets they sell, and many of them do so from ticket-holders who decide to sell. The decision of whether to sell your own ticket to a scalper depends in part on the price offered: the higher the price offered, the more likely that you will be willing to sell. So just as the quantity of tickets that people are willing to buy depends on the price they have to pay, the quantity that people are willing to sell—the quantity supplied depends on the price they are offered. (Notice that this is the supply of tickets to the market in scalped tickets . The number of seats in the stadium is whatever it is, regard- less of the price—but that’s not the quantity we’re concerned with here.) The Supply Schedule and the Supply Curve The table in Figure 3-5 shows how the quantity of tickets made available varies with the price—that is, it shows a hypothetical supply schedule for tickets to Gretzky’s last game. A supply schedule works the same way as the demand schedule shown in Figure 3-1 in “The Demand Curve”: in this case, the table shows the quantity of tickets season subscribers are willing to sell at different prices. At a price of $100, only The quantity supplied is the actual amount of a good or service people are willing to sell at some specific price. A supply schedule shows how much of a good or service would be supplied at different prices.
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CHAPTER 3 SECTION 2: THE SUPPLY CURVE Figure 3-5 $350 300 250 200 150 100 8,800 8,500 8,000 7,000 5,000 2,000 5,000 0 10,000 15,000 20,000 Quantity of tickets $350 300 250 200 150 100 50 Price of ticket Price of ticket Quantity of tickets supplied Supply Schedule for Tickets Supply curve, S As price rises, the quantity supplied rises. The supply schedule for tickets is plotted to yield the corresponding supply curve, which shows how much of a good people are willing to sell at any given price. The supply curve and the supply schedule reflect the fact that supply curves are usually upward sloping: the quantity supplied rises when the price rises. The Supply Schedule and the Supply Curve 2,000 people are willing to part with their tickets. At $150, some more people decide that it is worth passing up the game in order to have more money for some- thing else, increasing the quantity of tickets available to 5,000. At $200, the quan- tity of tickets available rises to 7,000, and so on. In the same way that a demand schedule can be represented graphically by a demand curve, a supply schedule can be represented by a supply curve, as shown in Figure 3-5. Each point on the curve represents an entry from the table. A
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This note was uploaded on 04/10/2008 for the course ECONOMICS 103 taught by Professor Sheflin during the Spring '08 term at Rutgers.

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KW_Macro_Ch_03_Sec_02_Supply_Curve - chapter 3 > Supply...

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