Law of Supply
The graph shows a supply curve. Which change is illustrated by the shift taking place on this graph?
X an increase in supply (wrong)
Sample scenario: Scientists have created a new grass seed that stops grass growth at a specific length, eliminating the need to mow the lawn. The price of this seed is high, but many consumers still want to use it. As a result, several different producers supply a large amount of this seed to consumers. In order to attract consumers to their product, some producers lower their prices and supply fewer bags of seeds. What is the best description of the grass seed that is described in this scenario?
a good with an elastic supply
The study of the interaction between individuals and businesses is known as
microeconomics.
The law of supply demonstrates the behaviors of producers when they
supply goods to consumers.
Which best explains why the law of supply operates the way it does in a free enterprise economy?
Companies want to be as profitable as possible.
... is a measure of behaviors by producers and consumers in response to changes in price.
Elasticity
This graph shows a supply curve. What happens when the price of a good increases?
The quantity of goods that are produced increases.
Sample scenario: A factory produces blue and green widgets, both at equal production costs. In one day, the factory can make 20 widgets of either color. The factory has been making 10 blue and 10 green widgets per day because they both sell for $5.00. Recently, the price of blue widgets has increased from $5.00 each to $8.00 each. How does the law of supply say the factory will respond to the increase in the price of blue widgets?
by increasing the number of blue widgets supplied
When prices for homes rise, why might construction companies decide to build more homes?
to make a profit
Which factors must a producer consider when deciding what good to supply? Check all that apply.
~the elasticity of a good being supplied ~competition within the market ~the ability to produce the good efficiently
