Principles of Economics- Mankiw (5th) 73

Principles of Economics- Mankiw (5th) 73 - CHAPTER 4 T H E...

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CHAPTER 4 THE MARKET FORCES OF SUPPLY AND DEMAND 77 MARKET SUPPLY VERSUS INDIVIDUAL SUPPLY Just as market demand is the sum of the demands of all buyers, market supply is the sum of the supplies of all sellers. Table 4-5 shows the supply schedules for two ice-cream producers—Ben and Jerry. At any price, Ben’s supply schedule tells us the quantity of ice cream Ben supplies, and Jerry’s supply schedule tells us the quantity of ice cream Jerry supplies. The market supply is the sum of the two in- dividual supplies. Market supply depends on all those factors that influence the supply of indi- vidual sellers, such as the prices of inputs used to produce the good, the available technology, and expectations. In addition, the supply in a market depends on the number of sellers. (If Ben or Jerry were to retire from the ice-cream business, the supply in the market would fall.) The supply schedules in Table 4-5 show what happens to quantity supplied as the price varies while all the other variables that
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.

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