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?
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
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