3-4Supply (1)

3-4Supply (1) - Supply Supply Individuals control the...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Supply
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Supply Individuals control the factors of production – inputs, or resources, necessary to produce goods. Individuals supply factors of production to intermediaries or firms.
Background image of page 2
Supply The analysis of the supply of produced goods has two parts: An analysis of the supply of the factors of production to households and firms. An analysis of why firms transform those factors of production into usable goods and services.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The Law of Supply There is a direct relationship between price and quantity supplied. Quantity supplied rises as price rises, other things constant. Quantity supplied falls as price falls, other things constant.
Background image of page 4
Law of Supply Law of Supply As the price of a product rises, producers will be willing to supply more. The height of the supply curve at any quantity shows the minimum price necessary to induce producers to supply that next unit to market. The height of the supply curve at any quantity also shows the opportunity cost of producing the next unit of the good.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The Law of Supply The law of supply is accounted for by two factors: When prices rise, firms substitute production of one good for another.
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 33

3-4Supply (1) - Supply Supply Individuals control the...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online