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Changes in Supply Factors Explained

This document defines key economic terms related to supply and demand including: quantity supplied, supply schedule, supply curve, law of supply, and shifts in supply. It discusses how quantity supplied changes with price, and the direct relationship between price and quantity along a supply curve. The five factors that can cause a supply curve to shift are identified as: technology, prices of related goods, input prices, competition, and expectations. Movement along the supply curve is caused by a change in price, while a shift of the supply curve is caused by one of the TRICE factors. An increase in supply shifts the curve to the right, and a decrease shifts it to the left. The text also defines inputs and discusses how changes in each of

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57 views8 pages

Changes in Supply Factors Explained

This document defines key economic terms related to supply and demand including: quantity supplied, supply schedule, supply curve, law of supply, and shifts in supply. It discusses how quantity supplied changes with price, and the direct relationship between price and quantity along a supply curve. The five factors that can cause a supply curve to shift are identified as: technology, prices of related goods, input prices, competition, and expectations. Movement along the supply curve is caused by a change in price, while a shift of the supply curve is caused by one of the TRICE factors. An increase in supply shifts the curve to the right, and a decrease shifts it to the left. The text also defines inputs and discusses how changes in each of

Uploaded by

Kyle
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Name: ______________Kael Lenus____________________________________

Module 6 Supply and Demand: Supply and Equilibrium p. 59-69

Define the term quantity supplied

The actual amount of a good or service that producers are willing to sell at some specific price.

Define the term supply schedule

How much of a good or service producers will supply at different prices.

Define the term supply curve

A curve which show the relationship between quantity supplied and price.

Define the term law of supply

Price and quantity of a good are positively/directly related.

Define the term change in supply

Shift in the supply curve which results in a change in quantity supplied at every given price.

A movement along the supply curve

A change in quantity supplies of a good that is the result of a change in that good’s price.
As the price of a product increases, the quantity supplied _________increases_____________
[increases or decreases]

As the price of a product decreases, the quantity supplied _______decreases_______________


[increases or decreases]

Along a supply curve, there is a ________direct_________________ [direct or indirect] relationship


between price and quantity.

In the graph below, what causes the supply curve to shift from S1 to S2?
Economists believe that the shifts of the supply curve for a good or service are mainly result of five
factors…List them below

Entry of Vietnam into the coffee Bean business caused an increase in supply, hence an increase in
quantity supplied at any given price.

T- Technology

R- Related Prices

I-Input Prices

C-Competition

E-Expectations
What causes the movement from point a to point b?

Change in price.

What causes the movement from point a to point c?

TRICE factors.
Any event that increases the supply shifts the supply curve to the _____right____________[right or
left]

Any event that decreases the supply shifts the supply curve to the _______left__________ [right or
left]

Define the term input.

Anything that is used to produce a good or service.

Use the text on pages 62- 63 to complete the chart below with the main ideas that cause these factors
of supply to change

Changes in Input Prices


Anything that is used to produce a good or service. An increase in the price of an input makes the
production of the final good more costly for those who produce and sell it. Producers are less willing
to supply the final good at any give price and thus the supply curve shifts left.

Changes in Prices of Related Goods or Services


When a company produces several products the quantity of any one good it is willing to supply at any
given price depends on the prices of its other co-produced goods. Thus co-produced products are
substitutes. Other goods can be complements in production.
Changes in Technology
Technology means all the methods people can use to turn inputs into useful goods and services. The
better technology is, the less the cost of production, and thus it decreases input prices and shifts the
supply curve to the right.
Changes in Expectations
When supplier have some choice about when they put their good up for sale, changes in the expected
future price of the good can lead a supplier to supply less or more of the good today.

Changes in the Number of Producers


The market supply curve shows how the combined total quantity supplied by all individual producers
in the market depends on the market price of that good. An increase in the number of producers
leads to an increase in supply and a rightward shift of the supply curve.

What is the market supply curve?

The sum of the total quantity supplied by all individual producers of a good or service.

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