Change in Supply Schedule • Economist use the word to supply to refer to the Economist use the word to supply to refer to the relationship between price & quantity supplied relationship between price & quantity supplied • The # of goods offered at a specific price is called The # of goods offered at a specific price is called the quantity supplied at that price the quantity supplied at that price • The rise or fall in the price of a good will cause the The rise or fall in the price of a good will cause the quantity supplied to change but not the supply quantity supplied to change but not the supply schedule schedule • The seller will just move from one row to another The seller will just move from one row to another but when a factor other than price affects output a but when a factor other than price affects output a new supply schedule new supply schedule
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Change in Supply Schedule Economist use the word to supply to refer to the relationship between price & quantity suppliedEconomist use the word to supply.
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Change in Supply Schedule
• Economist use the word to supply to refer to the Economist use the word to supply to refer to the relationship between price & quantity suppliedrelationship between price & quantity supplied
• The # of goods offered at a specific price is called the The # of goods offered at a specific price is called the quantity supplied at that pricequantity supplied at that price
• The rise or fall in the price of a good will cause the The rise or fall in the price of a good will cause the quantity supplied to change but not the supply schedulequantity supplied to change but not the supply schedule
• The seller will just move from one row to another but The seller will just move from one row to another but when a factor other than price affects output a new when a factor other than price affects output a new supply schedule supply schedule
Price
As price falls…
Supply
Quantity supplied
falls
Price
As price
increases…
Supply
Quantity supplied increases
•According to the law of supplylaw of supply, suppliers will offer more of a good at a higher price.
$.50 1,000
Price per slice of pizza Slices supplied per day
Market Supply Schedule
$1.00 1,500
$2.50 3,000
$2.00 2,500
$1.50 2,000
Market Supply Curve
Pri
ce
(in
do
lla
rs)
Output (slices per day)
3.00
2.50
2.00
1.50
1.00
.50
0
0 500 1000 1500 2000 2500 3000 3500
Supply
Market Supply Curve
Pri
ce
(in
do
lla
rs)
Output (slices per day)
3.00
2.50
2.00
1.50
1.00
.50
0
0 500 1000 1500 2000 2500 3000 3500
Supply
Supply 2
S2 = Increase
Supply 3
S3 = Decrease
STONER
6 things thatwill cause a change in supply.
STONERSubsidies
A government payment that supports a business or market.
TaxesExcise Tax = Sometimes called a “Hidden Tax”, it is a tax on the production or sale of a good.