the difference between change in supply and change in quantity supplied
TRANSCRIPT
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The difference between
Change in Supply and change in
Quantity Supplied
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A change in price creates
Movement from point a to point b
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SLIDE
• Movement from point a to point b
is a slide “on or along” the supply curve,
resulting only from a change in price
• This is not a change in supply!!!!!!!!!
– only a change in quantity supplied because of a price change
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Remember “Ceteris Paribus”
Let’s change one of the conditions which we held constant when we
established the original supply schedule for Greebes – these variables
are referred to as the non-price determinants of supply
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A change in the Non-price DETERMINANTS OF SUPPLY
• – results in a shift in the Supply Curve
• CHANGES THE QUANTITY SUPPLIED AT EACH AND EVERY PRICE
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What does a Change in Supplylook like?
A SHIFT or new supply curve
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Review Time!!!!I told you this would be hard…
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Compare 2000 with 2001. Which of the following statements is (are) true?
Year Quantity Sold Price2000 30,000 $10.2001 50,000 $20.I. Demand has increasedII. Quantity demanded has increasedIII. Supply has increasedIV. Quantity supplied has increasedV. Supply has decreased
A. I onlyB. V onlyC. I and IV onlyD. I and V onlyE. I, II and III only
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Gotcha!
• Quantity demanded only increases or decreases by sliding along the demand curve
• When there is a change in demand, there is a new quantity demanded at each and every price
• The correct answer is C
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Non-price Determinants of Supply:
Factors that shift the Supply Curve
“ROTTEN”
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“R” is for resource
Changes in resource prices or input costs
Elements of nature and political disruptions
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“O” is for otherChange in Prices of
other goods produced and
offered for sale
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“T” is for technology
Changes in technology
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“T” is for taxes
Changes in taxes and subsidies
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“E” is for expectations
Change in expected future prices, (producer)
expectations
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“N” is for number
Change in the number of suppliers in the market
Elements of nature and political disruptions
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Non-price DETERMINANTS OF SUPPLY
• Changes in resource prices or input costs– Elements of nature and political disruptions
• Change in Prices of other goods produced and offered for sale
• Changes in technology• Changes in taxes and subsidies• Change in Expected future prices (producer)
expectations• Change in the number of suppliers in the market
– Elements of nature and political disruptions
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Quick tip
Any factor that increases the cost of production decreases supply
Any factor that decreases the cost of production increases supply