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Shift because of...

  1. Resource prices
  2. Technology
  3. Taxes
  4. Subsidies
  5. Quotas
  6. # of sellers
  7. Future price
  8. Weather

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Sellers willing / able to produce more when resources are cheap!

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Body of skills and knowledge concerning the use of resources in production

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Some taxes increase the per-unit costs!

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Subsidy: Payment made by gov’t for certain actions

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10,000

8,000

Quotas: Restrictions on the number of units of foreign produced goods

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Sellers expecting a higher future price will wait to sell

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Weather can affect the supply of a good

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What is the only factor that can change quantity supplied?

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Elasticity of Supply = Percentage Change in Quantity supplied

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Percentage Change in Price

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20%

Elasticity of Supply = ————

10%

Elastic

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Elastic supply exists when the quantity supplied changes by a greater percentage than price.

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10%

Elasticity of Supply = ————

30%

Inelastic: When the Qs changes by a smaller % than the price

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10%

Elasticity of Supply = ————

10%

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Unit Elastic Supply

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400

420

$50

$55

Supply= inelastic

5%

——

10%