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lectur15 - SupplyLecture 1 Supplyschedule anditsownprice...

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1 Supply Lecture Supply Lecture
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2 Supply Schedule and Supply Curve Supply Schedule and Supply Curve Supply schedule : :     A tabular depiction of the numerical  relationship between the quantity supplied  and its own price. Supply curve : : A A  graphical representation of the  relationship between the quantity supplied  and its own price.
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3 Supply schedule for hamburgers: Supply schedule for hamburgers: Price/lb Price/lb .            .            Quantity supplied Quantity supplied  $  .50 100 lbs. 1.00 200 lbs. 1.50 300 lbs. 2.00 400 lbs. 2.50 500 lbs.
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4 Relationship Between Supply and  Relationship Between Supply and   Quantity Supplied Q  Quantity Supplied Q s s As the price of hamburger increases,  ceteris paribus, the quantity supplied  increases.
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5 The Supply Curve for Hamburger The Supply Curve for Hamburger : : Supply Curve Price Quantity Supplied per unit time
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6 The Supply Curve: The Supply Curve: 1.One point on the supply curve represents  a single price / quantity  relationship. 2.The upward slope of the supply curve  indicates that the quantity supplied  increases with price.
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7 3. A change in the commodity's own price results     in movement along the supply curve. Q / u.t. Price S S P 0 P 1 Q 0 Q 1 As price goes from P to P 1 , quantity supplied goes from Q 0  to Q 1
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8 Increase in Supply: Increase in Supply: Is characterized by a shift of the supply curve to the  RIGHT. Price S 0 S 1 Q /u.t. At every price, quantity  supplied  is greater!
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9 A Decrease in Supply: A Decrease in Supply: Is characterized by a shift of the supply curve to the  LEFT. Price Q /u.t. At every price, quantity  supplied  is less! S 0 S 1
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10 Supply Defined: Supply Defined: Supply:  Relationship showing the various amounts  of a commodity that producers would be  willing and able  to sell at possible  alternative prices during a given time  period, ceteris paribus.
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11 Quantity Supplied Defined: Quantity Supplied Defined: Quantity Supplied Quantity Supplied : :     Total amount of a commodity that all  firms are  willing and able to sell , at a  given price, during a given time period.
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12 The Determinants of Supply The Determinants of Supply Commodity's own price: 1. P ↑ ⇒ Qs  ↑ , c.p.  (Law of Supply) 2.What type of relationship is  characterized by supply?  DIRECT 3.  Slopes up and to the right.
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13 Number of Firms in the Industry Number of Firms in the Industry If the number of business firms producing  a product increases,  ceteris paribus, the supply curve shifts to the right.
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14 Increased Business Firms Increased Business Firms Price S 1 Q /u.t.
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