Supply

Supply

What it takes to give

Open Ended

What comes to mind when you think of supply?

What is supply?

 shows amounts of a product a producer is willing and able to produce and sell at each specific price in a series of possible prices during a specified time period.

Poll

If you were a supplier selling his/her goods at a particular price and then you heard that the price of the good went up, what you you do?

• More

• Less

• Neutral

What does the image tell you about supply?

Law of Supply

Law of supply states: As price of a good increases, the quantity supplied of the good rises, and as the price of a good decreases, the quantity supplied of the good falls, ceteris paribus.

Multiple Select

If you were a producer who supplies goods to your local market but previously used a car to transport these goods would upgrading to a van improve your ability to supply more?

• Yes

• No

Poll

Do you think that increasing the the cost raw materials that are used in producing a good will affect supply?

• Yes

• No

Open Ended

If you were a supplier and you realized that the products you are selling might have more worth later on would you sell your goods now or later on?

Poll

Will an increase in the amount of persons selling goods in a market lead to a greater supply in the market?

• Yes

• No

Determinants of supply

• Production cost:

  Since most private companies’ goal is profit maximization. Higher production cost will lower profit, thus hinder supply. Factors affecting production cost are: input prices, wage rate, government regulation and taxes, etc.

• 2. Technology:

  Technological improvements help reduce production cost and increase profit, thus stimulate higher supply.

   

  
  

More Determinants

• 3. Number of sellers:

  More sellers in the market increase the market supply.

  
  

• 4. Expectation for future prices:

  If producers expect future price to be higher, they will try to hold on to their inventories and offer the products to the buyers in the future, thus they can capture the higher price.

• Prices of other goods - the supply of one good may decrease if the price of another good increases, causing producers to reallocate resources to produce larger quantities of the more profitable good