ECO 210
Supply Curve
A graphical object showing the relationship between the price of a good and the amount that sellers are willing and able to supply at various prices
Supply Schedule
A table showing the relationship between the price of a good and the amount of it that sellers are willing and able to supply at various prices
Quantity Supplied
The amount of a good that sellers are willing and able to supply at a given price
Law of Supply
The claim that, other things being equal, the quantity supplied of a good increases when the price of that good rises
Which of the following would be expected to have a supply curve that is more elastic in the short run? Tomatoes or Brain Surgeons
Tomatoes Because it takes years to train more brain surgeons, an increase in price would not immediately result in much expansion in the number of brain surgeons in the short run. By contrast, the production of tomatoes can be changed much more easily.
If it is difficult to increase production of a good in response to a higher price, the good is likely to have relatively ____________ Supply
inelastic
If a shortage exists in the cantaloupe market, then the current price must be __________ than the equilibrium price. For the market to reach equilibrium, you would expect. 1) lower/higher 2) buyers to offer higher prices/ sellers to offer lower prices/ persistent excess demand
lower; buyers to offer higher prices. Prices below the equilibrium price generate excess demand because buyers are willing to purchase more cantaloupes than sellers are willing to sell—the quantity supplied is less than the quantity demanded at that price. Some buyers who wish to purchase cantaloupes at the current price will be unable to do so. In order to purchase cantaloupes, some buyers will offer higher prices. As buyers bid and drive prices upward, some sellers will be willing to sell additional cantaloupes. Therefore, the market will move toward the equilibrium price, where the quantity of cantaloupes demanded by buyers equals the quantity supplied by sellers.