$1.00: What factors influenced the quantity you were willing to supply? Graph this like you would with demand. $0/hr

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2 Suppose it cost you $10.00 and one hour to make 10 cupcakes, how many would you produce at the following prices (assume your quantities will be sold at each price)? $0/hr $1.00: $1.50: $5/hr $2.00: $10/hr $3.00: $20/hr $4.00: $30/hr $5.00: $40/hr What factors influenced the quantity you were willing to supply? Graph this like you would with demand.

3 the quantity of a good/service that is available and how much suppliers are willing and able to produce and sell at various prices. what is worth your time and effort? Schedule Curve a listing of quantities supplied at various prices. Supplied $25 8 $20 5 $15 4 $10 3 $5 0 a graph of the supply schedule

4 Law of - suppliers will offer more at high prices & less at lower prices (positive relationship). As the price, existing firms will produce more and new firms will have an incentive to enter the market. The cost of producing a P S good is not equal across all suppliers. At a low price, a good is produced and sold only by the lowest cost suppliers. At a high price, a good is produced and sold by higher cost suppliers.

5 Change In a willingness and ability to increase quantity supplied at all price levels. - a shift to the right means increase in supply - a shift the left shows a decrease in supply Decrease in supply S1 Increase in supply Supplied

6 Change in $50 Greater Supplied at the Same Old New $10 57 Willing to Sell Same at Lower s 20 80

7 Change in $10 Smaller Supplied at the Same New Old Higher Needed to Sell Same

8 Determinants of - non-price conditions that influence a seller s willingness and ability to supply a good (QS changes at every price level). T - Technology I - Input Costs & Availability G- Gov t Influence: Taxes & Subsidies E- Expectation of Future s R-Related Good s s S Suppliers (# of) ****REMEMBER, a change in the PRICE doesn t shift the curve, it only causes a movement along the curve.

9 Technological Innovations A technological innovation lowers costs and increases supply, making sellers willing to offer more at a given price, or sell a their quantity at a lower price.

10 Input s and Availability A decrease in the price of an input (materials) increases profits and encourages more supply A supply shock will increase input prices, raise production costs and decrease supply. What will happen to the supply of lattes if there is a shortage of coffee beans?

11 Government Influences: Taxes and Subsidies A tax on output raises costs and decreases supply. A subsidy on production lowers costs and increases supply. 62

12 Expectations Sellers will adjust their current supply in anticipation of the direction of future prices in order to obtain the highest possible price. The expectation of a higher price for a good in the future decreases current supply of the good if they can store the good- (and vice versa). 63

13 Related Good s s Inputs used in production have opportunity costs. Sellers will choose to use those inputs where the profit is the highest. Sellers will supplyless of a good if the price of an alternate good using the same inputs rises (and vice versa). If SUVs become more popular, and more expensive, Honda will shift production to more SUVs and less Civics 64

14 Entry or Exit of Sellers As producers/sellers enter and exit the market, the overall supply changes. 65

15 Δ in TIGERS the entire supply curve shifts change in S Δ in price movement along the supply curve change in QS Δ in TIGERS the entire supply curve shifts change in S

16 Schedule Supplied $5 50 $4 40 $3 30 $2 20 of Cereal $ $1 10 o of Cereal Q 67

17 Schedule of Cereal $5 Supplied $5 50 $4 40 $3 30 What 4 if new companies 3 start making 2 cereal? $ $1 10 o of Cereal Q 68

18 Schedule $5 50 $4 40 $3 30 $2 20 Supplied of Cereal $ $1 10 o of Cereal Q 69

19 Schedule $5 50 $4 40 $3 30 $2 20 Supplied of Cereal $ $1 10 o of Cereal Q 70

20 Schedule Supplied $ $ $ $ of Cereal $ $ o of Cereal Q 71

21 Schedule of Cereal $5 S 2 Supplied $ $ $ $ $ o Increase in s didn t change but there is MORE cereal produced of Cereal Q 72

22 Change in Schedule of Cereal $5 $5 50 $4 40 $3 30 Supplied What 4 if a drought destroys 3 corn and wheat 2 crops? $ $1 10 o of Cereal Q 73

23 Change in Schedule $5 50 $4 40 $3 30 $2 20 Supplied of Cereal $ $1 10 o of Cereal Q 74

24 Change in Schedule $5 50 $4 40 $3 30 $2 20 Supplied of Cereal $ $1 10 o of Cereal Q 75

25 Change in Schedule Supplied $ $ $ $ of Cereal $ $ o of Cereal Q 76

26 Change in Schedule Supplied $ $ $ $ of Cereal $ S 2 Decrease in s didn t change but there is LESS cereal produced $ o of Cereal Q 77

27 Change in Schedule of Cereal $5 Supplied $5 50 $4 40 $ What if cereal companies find a quicker 3 way to make 2 cereal? $ $1 10 o of Cereal Q 78

28 Practice Hamburgers 1. Mad cow disease kills 20% of cows 2. of hamburgers increase 30% 3. Government taxes burger producers 4. Restaurants can produce burgers and/or tacos. A demand increase causes the price for tacos to increase 500% 5. New bun baking technology cuts production time in half 6. Minimum wage increases to $20