Lecture 8

Lecture 8 - January 30, 2009 Section 4.2 Quantity Supplied...

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January 30, 2009 Section 4.2 Quantity Supplied – amount of a good, service or resource that people are willing and able to sell during a specified period at a specified price Law of Supply – (other things remaining the same) If the price of a good rises, the quantity supplied of that good increases If the price of a good falls, the quantity supplied of that good decreases Demand based on affordability and supply based on profit If you increase price of cell phones, you end up producing more. Opp Cost goes up the more cell phones produced (makes DVDs look better). Profit = Revenue – Cost Revenue = price of output * quantity producing Cost = price of input * quantity producing Supply curve shifts whenever ceteres paribus does not hold
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Supply – the relationship between quantity supplied of a good & price of the good when all other influences on selling plans remain the same (from seller’s perspective) Supply is a list of quantities at different prices and is illustrated by the supply curve
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Lecture 8 - January 30, 2009 Section 4.2 Quantity Supplied...

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