Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.
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Transcript of Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.
![Page 1: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/1.jpg)
Chapter 3-Presentation 2
SUPPLYhttp://www.youtube.com/watch?v=JWdZEumNRmI&ob=av2n
![Page 2: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/2.jpg)
Supply
• A schedule or curve showing the various amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specific period
![Page 3: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/3.jpg)
Law of Supply
• As prices rise, the quantity supplied rises… as prices fall, the quantity supplied falls• Direct relationship between price
and quantity supplied
![Page 4: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/4.jpg)
Supply Curve
• Upward sloping from left to right showing that as the price increases, companies are willing to provide more of good in order to increase profit
• Remember--- “supply to the sky”• ***y-axis is price, x-axis is quantity supplied• Be sure to label supply curve S, S1, S2 etc.
![Page 5: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/5.jpg)
Individual Supply 6
5
4
3
2
1
0
Quantity Supplied (bushels per week)
Pric
e (p
er b
ushe
l)
P Qs
$5
4
3
2
1
60
50
35
20
5
IndividualSupply
P
Q
S1
Supply Can Increase or Decrease
S2
S3
An Increase in SupplyMeans a Movementof the Line
A Movement BetweenAny Two Points on a
Supply Curve is Called a Change in Quantity
Supplied
2 4 6 8 10 12 14
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Determinants of Supply
• R- Resource Prices- Inputs that go into making a g/s• O- Other Goods’ Prices - Substitutes (milk/cheese) in
production and joint products (mulch/lumber)• T- Taxes and Subsidies• T – Technology Change- increased/decreased
efficiency• E- Expectations of Suppliers- expect. of future prices• N- Number of Sellers- more suppliers = higher S
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Equilibrium Price
• The price where the intentions of buyers and sellers meet• Quantity Demanded = Quantity
Supplied
![Page 8: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/8.jpg)
Equilibrium Quantity
• The quantity demanded = quantity supplied• QD and QS at the equilibrium price
![Page 9: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/9.jpg)
Equilibrium Price and Quantity
• Equilibrium exists where the two graphs meet
![Page 10: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/10.jpg)
Graph: Increase in demand, supply constant (New E price? Quantity?)• Equilibrium Price: • Equilibrium Quantity:
![Page 11: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/11.jpg)
Graph: Decrease in Supply, Demand stays Constant (New Equilibrium Price/Quantity? )
• Equilibrium Price: • Equilibrium Quantity:
![Page 12: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/12.jpg)
People Suddenly prefer Fords over VW
• Price: • Quantity:
![Page 14: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/14.jpg)
The Price of cheese goes down, show the effects on the pizza industry
• Equilibrium Price: • Equilibrium Quantity:
![Page 15: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/15.jpg)
People for Some Reason move away from Cleveland
• Equilibrium Price: • Equilibrium Quantity:
![Page 16: Chapter 3-Presentation 2 SUPPLY NRmI&ob=av2n.](https://reader031.fdocuments.us/reader031/viewer/2022032707/56649e0e5503460f94af85c8/html5/thumbnails/16.jpg)
Government Raises Business Taxes
• Equilibrium Price: • Equilibrium Quantity:
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Consumers in May Expect a Drought in August Hurting Oranges• Equilibrium Price: • Equilibrium Quantity:
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Labor Unions Negotiate Higher Wages for Auto Workers
• Equilibrium Price: • Equilibrium Quantity:
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• Supply Increase; Demand Decrease• Supply Decrease;
Demand Increase• Supply Increase;
Demand Increase• Supply Decrease;
Demand Decrease
Tough OnesPrice Quantity
?
?
?
?
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Shortage
• The amount the QD exceeds the QS at a certain price (below equilibrium)
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Price Floor
• A minimum price fixed by the government
• A price at or above the floor is legal, but anything below it is illegal
• Ex- Minimum Wage, Agricultural prices
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Price Ceiling
• A maximum price a seller may charge for a product or service• Ex- rent controls
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Market Equilibrium 6
5
4
3
2
1
0 2 4 6 8 10 12 14 16 18Bushels of Corn (thousands per week)
Pri
ce (
per
bu
shel
)
P Qd
$5
4
3
2
1
2,000
4,000
7,000
11,000
16,000
MarketDemand
200 BuyersP Qs
$5
4
3
2
1
12,000
10,000
7,000
4,000
1,000
MarketSupply
200 Sellers
200 Buyers & 200 Sellers
7
3
D
S
$4 Price Floor
6,000 BushelSurplus
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Market Equilibrium 6
5
4
3
2
1
0 2 4 6 8 10 12 14 16 18Bushels of Corn (thousands per week)
Pri
ce (
per
bu
shel
)
P Qd
$5
4
3
2
1
2,000
4,000
7,000
11,000
16,000
MarketDemand
200 BuyersP Qs
$5
4
3
2
1
12,000
10,000
7,000
4,000
1,000
MarketSupply
200 Sellers
200 Buyers & 200 Sellers
7
3
D
S
$2 Price Ceiling
7,000 BushelShortage