Econ_100_Ch2Part2(1)

Econ_100_Ch2Part2(1) - ECON 100: Introduction to...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Slide 1 of 55 ECON 100: Introduction to Microeconomic Theory Lecture 4 Yilan Xu
Background image of page 1

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

View Full DocumentRight Arrow Icon
Slide 2 of 55 The Supply Curve for Oil Supply represents the behavior of sellers. A Supply Curve is a function that shows the quantity supplied at different prices. § The Quantity Supplied is the quantity that producers are willing and able to sell at a particular price.
Background image of page 2
Slide 3 of 55 The Supply Curve for Oil The Law of Supply indicates a direct relationship between price and quantity supplied. § When price rises, all else equal, quantity supplied rises. § When price falls, all else equal, quantity supplied falls. Supply curves consistent with the law of supply are upward sloping.
Background image of page 3

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

View Full DocumentRight Arrow Icon
Slide 4 of 55 Supply Curves The Supply Curve for Oil is a Function Showing the Quantity of Oil Supplied at Different Prices Quantity of Oil (MBD) Price of Oil per Barrel Supply Curve for Oil 50 30 10 $5 $20 $55 Price Quantity Supplied $55 50 $20 30 $5 10
Background image of page 4
Slide 5 of 55 Supply Curves Supply curves can be read in two ways: § Horizontally: How much suppliers are willing and able to sell at a given price. § Vertically: The minimum price for which suppliers are willing to sell a given quantity. Supply curves, thus, reveal the quantity supplied at a given price, or the minimum price at which suppliers will sell a given quantity.
Background image of page 5

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

View Full DocumentRight Arrow Icon
Slide 6 of 55 The Supply Curve for Oil Start End Horizontal Reading Quantity of Oil (MBD) Price of Oil per Barrel Supply Curve for Oil 50 30 10 $5 $20 $55
Background image of page 6
Slide 7 of 55 Supply Curves Vertical Reading Quantity of Oil (MBD) Price of Oil per Barrel Supply Curve for Oil 50 30 10 $5 $20 $55 End Start
Background image of page 7

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

View Full DocumentRight Arrow Icon
Slide 8 of 55 Supply Curves Why is the supply curve upward sloping ? § The cost of producing a good is not equal across all suppliers. At a low price, a good is produced and sold only by the lowest cost suppliers. At a high price, a good is also produced and sold by higher cost suppliers.
Background image of page 8
Slide 9 of 55 The Supply Curve for Oil Supply Quantity of Oil (MBD) Price of Oil per Barrel The Supply Curve for Oil 6 0 4 0 2 0 $6 0 $4 0 $2 0 8 0 10 0 Oil Shale Profitable Here Low Cost Oil Higher Cost Oil
Background image of page 9

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

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/17/2012 for the course ECON 0100 taught by Professor Kenkel during the Spring '08 term at Pittsburgh.

Page1 / 29

Econ_100_Ch2Part2(1) - ECON 100: Introduction to...

This preview shows document pages 1 - 10. Sign up to view the full document.

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