Lec5 - d Number of suppliers – the greater the number of...

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Lecture 5 01/27/2011 Supply 1. Law of supply a. Opportunity cost: match or exceed the opportunity cost of the supplier. i. Accounting: highest paid b. Incentives 2. Supply schedule—supply curve a. The higher the price the greater the quantity supplied – the lower the price the less the quantity supplied --- all other things held constant 3. Determinants of supply – other than price a. The price of Inputs – costs of production (matching opportunity cost by increasing or decreasing price) b. Technology shifts the supply curve to the right because the cost of technology decreases, which means that it costs less to make things, therefore the supply schedule curve shifts to the right. c. Price of Related Goods In Production
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Unformatted text preview: d. Number of suppliers – the greater the number of suppliers the graph shifts to the right. e. Sellers Expectations about Future Prices – When suppliers expect future prices to be higher, they draw the supplies from today. If they expect housing to go down, they would sell it. 4. Change in supply vs. change in quantity supplied Determinants of Demand – other than price Shift Demand Curve Right or Left 1. Income/Wealth 2. Tastes/Preferences 3. Number of consumers 4. Prices of Related Products a. Substitute Goods or Services b. Complementary Goods or Services 5. Consumer’s Expectations about Future Prices 6. Consumer’s Expectations about Future Income...
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This note was uploaded on 10/02/2011 for the course ECON 200 taught by Professor Cramer during the Spring '07 term at Arizona.

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Lec5 - d Number of suppliers – the greater the number of...

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