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Unformatted text preview: ECN607 Managerial Economics Study Aid: lecture 2.2 The Law of Supply Supply is a schedule showing the relationship between price and amount supplied at various prices during a certain time. The law of supply states that the higher the price of a good, the larger the amount sellers will produce, ceteris paribus. The supply schedule is a table that displays the direct relationship between price and quantity supplied at each price in a given time period. The supply curve is a graphic representation of the supply schedule that is an upward sloping line displaying a positive relationship between price and amount supplied. The market supply curve is the supply curve of all individual sellers in the market. It is calculated by adding the quantity supplied at each price by each seller. Shifts in Supply A change in supply is a shift of the whole supply curve so that at each price the quantity supplied changes. A leftward shift in the supply curve means that the quantity supplied at each price drops and is changes....
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- Spring '10