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Chapter 4 - Supply. Law of Supply. As the retail price of a good or service increases, suppliers usually want to supply more. As the retail price of a good/service decreases, supplies usually want to supply less. P ↑S↑ and P↓S↓. Chap. 4 Vocab. Cont.
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Law of Supply • As the retail price of a good or service increases, suppliers usually want to supply more. • As the retail price of a good/service decreases, supplies usually want to supply less. • P↑S↑ and P↓S↓
Chap. 4 Vocab. Cont. • Supply Schedule – Table showing the quantity of an item to be produced at different prices. • Supply Curve – Graph illustrating the supply schedule • Visuals on pg. 74
Shifting Supply Curves • Increase in supply, curve shifts right • Decrease in supply, curve shifts left See visual pg. 80
Factors that Shift Supply • Change in Cost of Production • Lower costs, supply increases • Higher costs, supply decreases • Change in price of inputs – Dreyer’s Ice Cream • Improvements in technology • Increase in efficiency
Shifting Supply Curves 2. Producer expectations – Candy and flowers before Valentine’s Day
Factors that Shift Supply Curve 3. Price of related goods – What items are more profitable 4. Competition – Change in # of sellers 5. Govt. involvement (tools) • Taxes • Subsidies • Regulations
