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bars are produced each week, someone is willing to
accept $1.50 for the last bar produced. A Change in Supply
0 5 15
Quantity supplied (millions of bars per week) Price Quantity supplied (dollars per bar) (millions of bars per week) When any factor that influences selling plans other
than the price of the good changes, there is a change
in supply. Six main factors bring changes in supply.
They are changes in
■ A 0.50 0 ■ B 1.00 6 ■ C 1.50 10 D 2.00 13 E 2.50 15 ■
■ The prices of factors of production
The prices of related goods produced
Expected future prices
The number of suppliers
The state of nature Prices of Factors of Production The prices of the facThe table shows the supply schedule of energy bars. For
example, at a price of $1.00, 6 million bars a week are
supplied; at a price of $2.50, 15 million bars a week are
supplied. The supply curve shows the relationship between
the quantity supplied and the price, other things remaining
the same. The supply curve slopes upward: As the price of
a good increases, the quantity supplied increases.
A supply curve can be read in two ways. For a given
price, the supply curve tells us the quantity that producers
plan to sell at that price. For example, at a price of $1.50
a bar, producers are willing to sell 10 million bars a
week. For a given quantity, the supply curve tells us the
minimum price at which producers are willing to sell one
more bar. For example, if 15 million bars are produced
each week, the lowest price at which a producer is willing
to sell the 15 millionth bar is $2.50.
animation tors of production used to produce a good influence
its supply. To see this influence, think about the supply curve as a minimum-supply-price curve. If the
price of a factor of production rises, the lowest price
that a producer is willing to accept for that good
rises, so supply decreases. For example, during 2008,
as the price of jet fuel increased, the supply of air
travel decreased. Similarly, a rise in the minim...
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