ECON_2306 => Lecture 3 Slides

B a move from a to c c either move from a to b or a

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Unformatted text preview: what happens when a change in the price of printers affects the market demand demand for printers? a. A move from A to B. b. A move from A to C. c. Either move from A to B or A to C. d. None of the above. of the above Refer Refer to the graph below. Which of the following moves best describes what happens when a change in the price of printers affects the market demand demand for printers? a. A move from A to B. b. A move from A to C. c. Either move from A to B or A to C. d. None of the above. of the above 35 Principles of Microeconomics Principles of Microeconomics 36 9 SUPPLY A. Supply is a schedule that shows amounts of a product a producer is willing and able to produce and sell at each specific price in a series of possible prices during a specified time period. The following supply schedule portrays this in the corn example. A schedule shows what quantities will be offered at various prices or what price will be required to induce various quantities to be offered. SUPPLY DEFINED SUPPLY SCHEDULE Various Amounts CORN $ %/ !' ) * # " " )( *" "( ,( 37 Principles of Microeconomics Principles of Microeconomics 38 SUPPLY DEFINED SUPPLY SCHEDULE Various Amounts A Series of Possible Prices Series of Possible Prices CORN SUPPLY B. Law of supply. Producers will produce and sell more of their product at a high price than at a low price. There is a direct relationship between price and quantity supplied. Explanation: Given product costs, a higher price means greater profits and thus an incentive to increase th the quantity supplied. Beyond some production quantity producers usually encounter increasing costs per added unit of output. $ %/ !' ) * # " " )( *" "( ,( …a specified time period …other things being equal 39 Principles of Microeconomics C. The supply curve. The graph of a supply schedule appears in the following Figure It shows a direct relationship in an upward sloping curve. of Microeconomics Principles 40 10 GRAPHING SUPPLY Price of Corn GRAPHING SUPPLY Price of Corn P Plot the Points CORN $5 4 P Plot the Points CORN $5 4 $ %/ !" # * ) ' 20 30 40 50 60 70 80 Corn $ %/ !" # * ) ' 10 20 30 40 50 60 70 80 Quantity of Principles of Microeconomics Corn 3 2 1 ,( "( *" )( " 3 2 1 ,( "( *" )( " o 5 10 Q 41 o Q 42 Quantity of Principles of Microeconomics GRAPHING SUPPLY Price of Corn GRAPHING SUPPLY Price of Corn P Plot the Points CORN $5 4 P Plot the Points CORN $5 4 $ %/ !" # * ) ' 10 20 3035 40 50 60 70 80 Quantity of Principles of Microeconomics Corn $ %/ !" # * ) ' 10 20 30 40 50 60 70 80 Quantity of Principles of Microeconomics Corn 3 2 1 ,( "( *" )( " 3 2 1 ,( "( *" )( " o Q 43 o Q 44 11 GRAPHING SUPPLY Price of Corn GRAPHING SUPPLY Price of Corn P Plot the Points CORN $5 4 P $5 4 S CORN $ %/ !" # * ) ' 10 20 30 40 50 60 70 80 Quantity of Principles of Microeconomics Corn $ %/ !" # * ) ' ,( "( *" )( " 3 2 1 ,( "( *" )( " 3 2 1 Connect...
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This note was uploaded on 04/15/2010 for the course ECON 2306 taught by Professor Bailiff during the Spring '08 term at UT Arlington.

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