4 - Price movement along a(fixed supply curve Input prices...

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GECON 200 9/4/08 Notes Universality of the Law of Demand Supply Schedule and Supply Curve Supply schedule: To get a good “supplied,” the buyer must overcome the seller’s opportunity cost Supply curve Law of Supply The higher the price, the higher the quantity supplied; the lower the price, the lower the quantity supplied; other things equal (ceterus paribus) 5 Influences on the supply relationship Price Input prices (resource cost) Technology: cost reducing technology increases supply (ex: consumer electronics) # of Sellers: with a greater # of sellers, supply increases Seller expectations: a higher expected price in future, reduces supply Shift of supply curve vs. movement along
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Unformatted text preview: Price: movement along a (fixed) supply curve Input prices: shift of entire curve Technology: shift of entire curve Seller expectations: shift of entire curve # of sellers: shift of entire curve Which of the following would not shift the supply curve of mountain bikes to the right in a given time period? Decreased cost of frame materials (aluminum, etc.) Cost-reducing technology in bicycle manufacturing Entry of new mountain bike producers Increased price of mountain bikes Reactions of P, G to changes in supply, demand Increase in demand: P up, Q down Decrease in demand: P down, Q down Increase in supply: P down, Q up Decrease in supply: P up, Q down...
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This note was uploaded on 10/19/2008 for the course GECON 200 taught by Professor Subrick during the Spring '08 term at James Madison University.

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4 - Price movement along a(fixed supply curve Input prices...

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