Supply Notes

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					                  Chapter 4- Supply Guided Notes

1. Supply the quantity of a good or service producers are willing and
able to sell at different prices at a particular time.

2. Law of Supply a ___________ relationship between the quantity
supplied and the price of the product.
      -As the price _______, the quantity of supply will tend to ______. As
      the price _______, the quantity of supply will tend to ____________.

3. Is supply relevant to buying or selling?
       Answer: ____________

Individually record 3 examples of supply rising or selling do to prices
4. A supply graph is always ________________, the opposite of demand.

5. You can graph the supply of a good or service by determining the cost
of a good and how much a supplier is willing to supply at that price.
For Example: OPEC’s supply of oil:
Price                                      Quantity Supplied
$2 per/gal.                         2 million gal. per/wk
$4 per/gal.                         4 million gal. per/wk
$6 per/gal.                         6 million gal. per/wk
$8 per/gal.                         8 million gal. per/wk
6. Graph this problem: Wengert’s Dairy is willing to supply milk to Weis
at the following prices 10 gallons of milk at $1.50 per/gal, 20 gallons of
milk at $2.00, 30 gallons of milk at $2.50 per/gal, and 40 gallons of milk
at $3.00 per/gal.

7. Market __________ The total of all individual suppliers’ products in a
market at a particular time.
      •Example All shoe producers (Nike, Under Armor, Reebok,
      Adidas etc…) supplies in the market.

8. Complete the Table and Graph on the next page.
     -Calculate the Market Supply, then complete the graph for the
     Market Supply
Price    Hunter’s   Emily’s   Kelsey’s   Nat’s Oil   Market
Per      Oil        Oil       Oil        Supply      Oil
Gallon   Supply     Supply    Supply                 Supply

$3.25    20         10        15         40

$3.75    30         15        15         45

$4.25    40         20        25         50
9. Shift in Supply Curve

1. When prices __________ and __________, it causes the supply curve to shift
right or left (just like demand)
2. Prices _______- Increases output, shift right
3. Price declines- Decreases output, shift _______

10. Elasticity of Supply- If a change in price causes a _________ change in
supply, the price effect is said to be elastic.

      Example: Number of gallons of milk increases. Suppliers can
      increase amount of supplies of milk without spending more to
      produce the milk.

 Inelasticity of Supply- The price change has a much __________ influence
on the quantity supplied.
     Example: Gasoline (Page 54).Increases in the price of gasoline
     generates very little on the quantity supplied.

11. Causes for change in Supply:
      1.Changes in ____________ cost of production:
           –Businesses invest in research to discover ways to improve
           production strategies, find better less expensive materials,
           and design better/more efficient equipment
      2.Changes in number of ______________
           –New businesses may enter the market for certain products
      3.Changes in _________________
           –If producers expect higher or lower future prices for their
           products, they may change the amount supplied today

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