05 110 127 emc chap 05 52506 247 pm page 117 focus

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Unformatted text preview: nt to work for McDonald’s, according to the law of supply? 05 (110-127) EMC Chap 05 5/25/06 2:47 PM Page 117 Focus Questions What does it mean when a supply curve shifts to the right? What does it mean when a supply curve shifts to the left? What factors can change supply? What factor can change quantity supplied? The Supply Curve Shifts Key Terms quota elasticity of supply elastic supply inelastic supply technology advancement in technology per-unit cost subsidy Supply can go up, and it can go down. For example, the supply of computers can rise or fall. Every time the supply of a good changes, the supply curve for that good “shifts.” By shift we mean that it moves; it moves either to the right or to the left. EXH IBIT 5-4 Shifts in a Supply Curve Original supply curve S3 Price (dollars) When Supply Changes, the Curve Shifts C $1,000 S1 A S2 B Change in supply → Shift in supply curve For example, if the supply of computers increases, the computer supply curve shifts to the right. If the supply of computers...
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