Lecture 6 - Lecture 6: Supply and Demand, Part 3 things...

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Lecture 6: Supply and Demand, Part 3 things that shift the supply curve elasticity Things that Shift the Supply Curve changes in the prices of inputs o higher costs supply decreases o lower costs supply increases new technology o new technology supply increases changes in the of other potential output o rise in the price of cupcakes more profitable to produce cupcakes devote more resources to the production of cupcakes supply of doughnuts decreases o fall in the price of cheese less profitable to produce cheese devote fewer resources to the production of cheese supply of ice cream increases changes in the number of producers o more sellers supply increases o fewer sellers supply decreases changes in expected future prices o expect higher prices supply decreases now o expect lower prices supply increases now Elasticity We want to measure the magnitude by which consumers change the quantity demanded in response to a change in the price of the product. The more elastic demand is, the more responsive
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Lecture 6 - Lecture 6: Supply and Demand, Part 3 things...

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