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Unformatted text preview: by the supply curve
and the supply schedule. The term quantity supplied
refers to a point on a supply curve—the quantity
supplied at a particular price.
Figure 3.4 shows the supply curve of energy bars. A
supply curve shows the relationship between the quantity supplied of a good and its price when all other
influences on producers’ planned sales remain the same.
The supply curve is a graph of a supply schedule.
The table in Fig. 3.4 sets out the supply schedule
for energy bars. A supply schedule lists the quantities
supplied at each price when all the other influences on
producers’ planned sales remain the same. For example, if the price of a bar is 50¢, the quantity supplied
is zero—in row A of the table. If the price of a bar is
$1.00, the quantity supplied is 6 million energy bars a
week—in row B. The other rows of the table show the
quantities supplied at prices of $1.50, $2.00, and
To make a supply curve, we graph the quantity
supplied on the x-axis and the price on the y-axis, just
as in the case of the demand curve. The points on the
supply curve labeled A through E correspond to the
rows of the supply schedule. For example, point A on
the graph shows a quantity supplied of zero at a price
of 50¢ an energy bar. 9160335_CH03_p053-080.qxd 6/22/09 8:56 AM Page 61 Supply The Supply Curve Price (dollars per bar) FIGURE 3.4
3.00 Supply of
2.50 E 2.00 D 1.50 C 1.00 B 0.50 A 61 Minimum Supply Price The supply curve can be
interpreted as a minimum-supply-price curve—a
curve that shows the lowest price at which someone is
willing to sell. This lowest price is the marginal cost.
If a small quantity is produced, the lowest price at
which someone is willing to sell one more unit is low.
But as the quantity produced increases, the marginal
cost of each additional unit rises, so the lowest price
at which someone is willing to sell rises along the
In Fig. 3.4, if 15 million bars are produced each
week, the lowest price at which someone is willing to
sell the 15 millionth bar is $2.50. But if 10 millio...
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