The upward sloping supply curve in exhibit 5 1b is

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Unformatted text preview: the amount of a good sellers are willing and able to sell at various prices. The upward-sloping supply curve in Exhibit 5-1(b) is the graphic representation of the law of supply. A Vertical Supply Curve The law of supply, which holds that as price rises, quantity supplied rises, does not hold true for all goods; nor does it hold true over all time periods. First, it does not hold for goods that cannot be produced any longer, such as Stradivarius violins. These violins were made by Antonio Stradivari more than 250 years ago. It is impossible for an additional Stradivarius violin to be produced today, because Stradivari died in 1737. No matter how high the price goes, the quantity supplied cannot increase to more than the total number of Stradivarius violins that currently exist. Thus, the supply curve of Stradivarius violins is not upward sloping but vertical, straight up and down, as shown in Exhibit 5-2(a). In another example, a theater in St. Louis is sold out for tonight’s play. Increasing ticket prices from $40 to $50 would not create additional seat...
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