ECON 104 notes 1\/26 - review session monday 6pm 104 keller Supply Law of supply holding all else constant increases in the price of a product cause an

ECON 104 notes 1/26 - review session monday 6pm 104 keller...

This preview shows page 1 - 3 out of 4 pages.

*** review session monday 6pm 104 keller Supply Law of supply: holding all else constant, increases in the price of a product cause an increase in the quantity supplied , and vice versa; direct relationship Price Quantity Supplied 1,000,000 250 5,000 200 500 150 100 125 20 6 10 5 3 1 A change in supply is when the entire supply curve shifts. This is because an exogenous factor changes sellers’ willingness to sell a product at every price. A change in quantity supplied is when a sellers’ willingness to sell changes BECAUSE the price changed. This is an endogenous change and results in a movement along the curve. What causes a shift in supply? Price of inputs p q s 1 S2: leftward shift; decrease in supply s p q
Image of page 1
Technological changes Price of substitutes in production Number of firms Expected future price Market Equilibrium **Sometimes the market equilibrium changes due to exogenous factors (our demand and supply shifters) For example, when demand increases, the price and quantity increase as well
Image of page 2
Image of page 3

You've reached the end of your free preview.

Want to read all 4 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes