Chapter 4 - Elements of Supply

8/18/2019 Chapter 4 - Elements of Supply

1/23


2/23


3/23


4/23


5/23


6/23


7/23


8/23


9/23


10/23


11/23

11

Chapter 4Elements of Supply

Change in Quantity Supplied

- It is a movement along a supply curvein response to a change in price.


12/23

12


Supply Schedule


13/23

13


Change in Supply

- is a change in the entire relationshipbetween price and quantity supplied. Anincrease in supply means the sellers

would choose to sell more at any prices; adecrease in supply means that they wouldchoose to sell less at any price.


14/23

14


Change in Supply

- are represented by a shift in thesupply curve. When supply increases,

the supply curve shifts to the right;when the supply decreases, the supplycurve shifts to the left.


15/23

15


Supply Schedule


16/23

16


Determinants of Supply

• Prices of Inputs• Prices of Related Goods•

Technology• Productive Capacity• Expectations of Future Prices


17/23

17



• Regulation and Law


18/23

18



1. Prices of Inputs

- A rise in the price of an inputs causes adecrease in supply, shifting the supply curve to theleft.


19/23

19


Determinants of Demand

2. Prices of Related Goods

- A rise in the price of analternate good will decrease thesupply of a good, shifting the supplycurve leftward.


20/23

20



3. Technology

- Cost-saving technologicaladvancement


21/23

21



4. Productive Capacity

- An increase in the number of firmsin an industry or an increase in the size ofeach firm will increase supply.


22/23

22



5. Expectations of Future Prices

- A rise in the expected price of agood will decrease the supply.


23/23

23



6. Regulation and Law

Chapter 4 - Elements of Supply

Documents

Transcript of Chapter 4 - Elements of Supply