3 Supply Student Copy

3 Supply Student Copy - Supply Chapter 3 It is not that...

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Supply Chapter 3 It is not that pearls fetch a high price because men have dived for them; but on the contrary, men dive for them because they fetch a high price. Introductory Lectures on Political Economy par. IX.47
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At the end of this Section you should be able to: l Define and Draw the Supply Curve l Discuss and apply the law of supply l Know difference between supply and quantity supplied l Evaluate properties that shift the supply curve
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Supply Curve Defined l A Supply Curve is the graph of the relationship between the price of a good and the quantity supplied. l Firms perform cost-benefit analysis on whether or not to produce. l The Supply Curve is dependent upon firms’ costs. l Supply Curve can be interpreted in 2 ways: l 1. For a given price, the supply curve indicates the quantity the industry will supply. l 2. For a given quantity, the supply curve indicates a seller’s reservation price (the minimum price that a producer is willing to accept for one unit when exchanging goods or services).
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3 Supply Student Copy - Supply Chapter 3 It is not that...

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