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Intro to supply powerpoint
- 1. What do you think of when you hear the word supply? How do you think supply will be different from demand?
- 2. Why do producers want to provide products at the highest possible price? SUPPLY
- 3. SUPPLY Supply is the willingness (desire) and ability of producers to offer goods and services for sale Similar to demand: willingness and ability! Ex: A farmer on antarctica will be unable to produce any crops no matter his/her desire. Thus, he/she cannot supply markets with products.
- 4. LAW OF SUPPLY As prices fall, quantity supplied falls. As prices increase, quantity supplied rises. This is a direct relationship or positive correlation. Example: A farmer typically grows carrots and tomatoes. If the market price is $1 per kg of tomatoes then he/she might produce 50 kg of tomatoes. If the price drops to $0.50 then he/she might only produce 25kg of tomatoes , so he/she can focus on more carrots.
- 5. SUPPLY SCHEDULE A supply schedule is a table that shows how much of a good or service an individual is willing and able to offer at each price. A market supply schedule is a table that shows how much of a good or service all producers in a market are willing and able to offer
- 6. EXAMPLE OF A SUPPLY SCHEDULE Look at page 132. How many pounds of tomatoes will the Smith’s offer for sale if the price is 1.75? How is this supply schedule different from a demand schedule?
- 7. EXAMPLE OF MARKET SUPPLY SCHEDULE P.133 How does the quantity supplied of tomatoes change when the prices rises from .75 a pound to 1.75 a pound? Increases from 100 to 300: an increase of 200lbs
- 8. APPLICATION B Imagine that you own a health food store that sells several brands of nutrition bars. Create a supply schedule showing how many bars you would be willing to sell each month at prices of 5, 4, 3, 2, and 1
- 9. SUPPLY CURVES Show the data from supply schedules in graph form Market supply schedules show data from market supply schedules in graph form.
- 10. APPLYING APPLICATION B Take the market schedule you made for application B and create a supply curve How does this curve look different from a demand curve?
- 11. SUPPLY CURVES CONT.. Look at page 134, figure 5.4 How many pounds of tomatoes will the Smiths offer for sale when the price is 1.50? Look at figure 5.5 At which price will all the fruit and vegetable stands want to sell 200 pounds of tomatoes?