Economics Chapter 5

What is change in market supply

WHen there is changes in conditions that cause firms to supply a lesser or greater quanity of a good or service at every price level in the market

How is it reprsented on the supply curve

2. It's represented by a shift of the supply curve

3. What is the difference between a Firm's (Individual Business) Supply Curve and the Market's Supply Curve?

A firm's supply curve and the Market Supply Curve are that a firm's supply curve is the supply curve for a particular firm. While the market's supply curve is the sum of all firm's supply curves.

2. Explain a situation in which you would have a Vertical Supply Curve?

A theater in St. Louis is sold out for tonight's play. Increasing ticket prices from $20 to $40 would not create additional seating because it does not allow the theater to add more seats. So no matter how high the price goes, the quantity supplied can not be increased to no more than the total number of seats. So you would end up with a vertical supply curve.

Why is the supply curve upward sloping/why does the prices and quantity supplied have a positve relationship

Because the relationship between price level and quantity supply is positive. As prices rise through the market, firms are more willing or more able to supply the same quality of outputs supplying more. As prices fall the firms are less willing and less able to supply the same quality of outputs supplying less.

3. What causes a CHANGE in QUANTITY SUPPLIED? What does this look like on a graph?

Price is what causes a change in quantity supplied. A change in quantity supplied is shown as a movement along a supply curve.

What happens to supply and quanity supplied when the entire curve shifts to the left?

Supply has decreased in the market and a lesser quanity of output is being produced no matter the price level. Firms are producing less of a good or service

W

An increase in per unit taxes will cause a decrease in supply of a good because the business wants to avoid paying the tax for every good

What happens to supply when there is an increase of availability of resources

An increase in the availability of resources will cause an increase in the supply of a good in the product market.

What happens to supply when prices of resources increase

An increase in the price of resources will cause a decrease in the supply of a good in the product market because a company is not going to be able to buy as much as they usually do with their capital. They will have significantly less inputs to produce with so firms will produce lesser quantities of a good at every price level.

2. How do TAXES, SUBSIDIES, and QUOTAS each affect Supply of a product?

At times taxes increase the per-unit costs. So they must pay a certain amount of tax for each product it produces. It brings an extra cost to doing business. What happens is manufacturers will supply less output of a product because it makes it more expensive and less profitable for the producers to manufacture the product. The supply of the product decreases and the supply curve shifts to the left. When the government offers subsidies for the production of a product, the opposite effect of taxes happens. The supply of a product increases because for example farmers or producers will want to produce more of a product at every price. So the supply curve shifts to the right. How Quotas affect the supply of a product is it decreases the supply of a product. If a government puts restrictions on the amount of supply of a product that can enter a country. The producers will not be able to produce as much as they have before because of the restriction. So they will produce less of the product.

Law of Supply?

The Law of Supply is a law that states that as the price of a good increases, the quantity supplied of the good increases, as the price of a good decreases, the quantity supplied of the good decreases.

How does the Law of Supply differ from the Law of Demand and who is in control of the Law of Supply?

The Law of Supply is a law that states that as the price of a good increases, the quantity supplied of the good increases, as the price of a good decreases, the quantity supplied of the good decreases. The law of supply has a direct relationship. While the Law of demand states that as a price increases the demand for a good decreases. As the price of a good decreases the demand of the good increases. It has an inverse relationship. Suppliers are in charge of the Law of Supply.

What happens to supply and quantity supplied when the entire curve shifts to the right?

When the entire curve shifts to the right, supply has increased in the market and a greater quantity of output is being produced no matter the price level. Overall firms are producing more of a good or service.

1. How is an increase in Supply represented on a graph and what does the graph then show us regarding Supply for a product when Supply increases?

When there is an increase in supply the graph shifts to the right. A shift to the right on a graph shows us that sellers want to sell more of a product at each and every price.

What is supply

the various quantities of a good or service that firms are willing and able to produce at different price levels in the market