Unformatted text preview: Q i 1 = g i ( P 1 | P R1 , P R2 , …; P 2 , P 3 , …; S 1 , S 2 , …; T i ; E i ). There are N firms, each of whom has similar supplies for good 1. The market supply for this good is simply the sum of all of the quantities supplied by the N firms at each possible price: Q 1 = ∑ = N 1 i i 1 Q = ∑ = N 1 i g i ( P 1 | P R1 , P R2 , …; P 2 , P 3 , …; S 1 , S 2 , …; T i ; E i ). For simplicity, this can be written as Q 1 = G 1 ( P 1 | P R , P 2 , S , T , E , N ). Written in this form, the function clearly shows that the market supply for a good is a relationship between the quantity supplied of a good and its price, holding constant the prices of its resources, the prices of all other goods, subsidies and taxes, the state of technology, and the number of suppliers. A change in any of the factors previously held constant will result in a different relationship between Q 1 and P 1 . We would call this new relationship a change in supply....
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- Spring '10
- Supply And Demand, market supply, expectations E. Consider