Chapter 3 Econ Notes - joshuabryant

Chapter 3 Econ Notes
Law of Supply and Demand
Supply: a schedule that shows amounts of a product a producer is willing and able
to produce and sell at each specific price in a series of possible prices during a
specified time.
Law of Supply: Producers will produce and sell more of their product at a high price
than at a low price. There is a direct relationship between price and quantity
supplied. Given product costs, a higher price means greater profits, an incentive to
produce more.
Supply curve: Shows direct relationship in an upward sloping curve
Determinants of Supply:
 A change in supply determinants cause a change in supply curve.
o Increase  line shifts to the right
o Decrease  shift left
 Six determinants other than price:
1. Resource prices
2. Technology
3. Taxes and Subsidies
4. Prices in related goods
5. Expectations
6. Number of Sellers