Demand and Supply_2

Demand and Supply_2 - Temple University Department of...

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Temple University Department of Economics Chapter 3: Part 2 (Demand and Supply) Monday: September 13, 2010 Supply reflects a decision about which technologically feasible items can be produced. It requires that A firm has resources and necessary technology to produce a good/service Can profit from producing it Plans to produce and sell it. Quantity supplied: is the amount of goods/services that a firm plans to sell during a given period of time at a particular price. Quantity supplied is not always the same as quantity demanded. There are three possible scenarios Surplus: quantity supplied exceeds quantity demanded Shortage: quantity supplied is less than quantity demanded Equilibrium: quantity supplied equals quantity demanded Match and compare demand and a supply schedules The Law of Supply : “Other things remaining the same, the higher the price of a good, the greater is the quantity supplied, and the lower the price of a good, the smaller is the quantity supplied”. This implies that the supply curve has a positive slope.
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Demand and Supply_2 - Temple University Department of...

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