mon tues supply curves

BellringerGet out homework on demand curves, Greebes

If you turned it in, get it from the pile

Why do firms care?• Demand predicts revenue

• Revenue = Price X Quantity sold CookiesPrice QD*Day Revenue

$0.20 7$0.40 4$0.60 2$0.80 1$1.00 1$1.20 0

ON SlatesWhat price should this company choose if

they want to maximize revenue?

What is the minimum, per hour I would have to pay you to work at Subway?

MANKIWCHAPTER 4 ALL WEEK

Pretend there is no minimum wage and you could work for less than $7.50

Law of Supply

• As the price of a good increases, producers will produce more (,or try to) quantity. As the price of the good decreases, producers will produce less quantity.

P Q and P Q

The supply curve is always upward sloping

$

Q

S

Push ups market:

A Supply Curve

Price ofpushups

Number of pushup Sellers

1 QE2 QE3 QE4 QE5 QE

Graph on board

Graph one:

A Supply Curve

Price ofWidgets

Number of WidgetsSellers Want to

Sell$1.00 10$2.00 40$3.00 70$4.00 140

For example….• Average prices of • Therefore…..

For example….

Producer Surplus• Difference between cost and sale price• IOW: profit

• Sale: $15• Cost: $10• PS = $5

Bellringer on slatesThink back to yesterday’s push up experimentBrainstorm 3 ways we could have increased the

entire supply curve of pushups, that is, more QD at every price level

If price changes Q*supply,What changes supply?

Business clip

• What is it?• 2+ ways the entrepreneur tries to increase

his own Qs at each price level

4 Determinants of Supply

• Price of production + or -• Taxes, regulation, raw

materials, labor

4 Determinants of Supply

• Expectations• If future P$ might rise, hold inventory• If future P$ might fall, increase supply

4 Determinants of Supply• Sellers (increase or decrease)

4 Determinants of Supply• Technology

4 Determinants of SupplyMnemonic

• Price of Production• Expectations• Sellers (#)• Technology

• PEST = supply determinants

• TRIBE = demand determinants

Diff between supply and DemandXbox games

• Supply or demand change?• Determinant

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CLOSED

Diff between supply and Demand Salsa


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mon tues supply curves

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