Macroeconomics: Chapter 3
Changes in Quantity Supplied
movements along a given supply curve
What causes a supply curve to shift?
-The number of sellers -Technology -Resource prices -Taxes and subsidies -Expectations -Prices of other goods/
Surplus
A market condition existing at any price where the quantity demanded supplied is greater than the quantity demanded. Price down
Shortage
A market condition existing at anyplace where the quantity supplied is less than the quantity demanded. Price up
Equilibrium
A market condition that occurs at any price and quantity where the quantity demanded and the quantity supplied are equal.
What is a change in Supply?
An increase or a decrease in the quantity supplied at each possible price point. Ex. When the curve shifts to the left or right.
Market
Any arrangement in which buyers and sellers interact to determine the price and quantity of goods and services exchanged
Expectations of producers
If producers expect an increase in the price of goods, they will decrease supply currently if price is expected to dec in the future, them supply will inc currently.
Taxes and Subsidies
If there is a tax inc there will be a dec in supply A subsidy is a payment from the government from the government for production. So if a subsidy increases rhen the supply will increase.
Prices of other goods the firm could produce
Many firms will shift production from one good to a good with a higher relative price. Firms want to produce more of the good with the higher relative price.
Technology
New, faster and more efficient technology will increase supply. Tech will only increase supply
Resouce Prices
When the cost of respires increase, this will decrease supply When the cost of resources decrease, this will increase supply
Number of Sellers
When the number of sellers decreases the supply will also decrease When the number of sellers increases the supply will also increases.