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Opening Question

  • What role do you personally play as a producer in today’s economy?
    • Remember that producers provide services as well as goods.

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What is Supply?

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Supply Concepts

  • SUPPLY: the amount of a product that would be offered for sale at all possible prices
  • LAW OF SUPPLY: producers will offer more for sale at higher prices than at lower prices
  • SUPPLY SCHEDULE: a listing of the various quantities of a particular product supplied at all possible prices in the market
  • SUPPLY CURVE: a graph showing the various quantities supplied at each and every price

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Supply Schedule & Curve

  • Mike has the following supply for his CD store.

Price

Quantity Supplied

$30

8

$25

7

$20

6

$15

4

$10

2

$5

0

1 2 3 4 5 6 7 8 9 10

​

​

$30

​

$25

​

$20

​

$15

​

$10

​

$5

​

0

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Finding the Market Price

  • MARKET SUPPLY CURVE: the supply curve that shows the quantities offered at various prices

Price

Market

30

19

25

16

20

13

15

9

10

5

5

1

2 4 6 8 10 12 14 16 18 20

​

​

$30

​

$25

​

$20

​

$15

​

$10

​

$5

​

0

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Time to Apply

  • The Jolly Music Co. has three employees. Two work 40-hr weeks and one works a 25-hr work week. Each worker just received a raise from $8.40 an hr to $9.92 an hr.
  • What was the company’s old weekly wage cost?
  • What is the company’s new weekly wage cost?
  • How much more do they pay now?
  • How might this increase in pay affect supply?

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Time to Apply

  • Mr. Henderson needs students to clean the classroom. Graph a supply curve for the following supply schedule.
  • What price should Mr. Henderson choose to pay?

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Price

Quantity of Students

$1 per hour

0

$2

0

$3

1

$4

1

$5

2

$6

4

$7

5

$8

8

$9

11

$10

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