as price goes up, the

qtty supplied of the

product will usually
increase, ceteris
paribus
Law of supply where planning takes
place, all factors of
Long run production are variable
but state of technology
is fixed
HOW TO EXPLAIN IT?

where production takes

Short run place, some factors are
fixed

rise in factors of
production (ie: wages
Cost of factors of increase), this increases
production the firm's costs thus
decreasing qtty
supplied

a firm has to chhoose

between two different
competitive supply
products, onlyone can
be focused on

Price of related goods

one good is produced

The willingness and
and another is at the
ability of producers to joint supply
same time = by product
produce a product/ Def:
(sugar => molasses)
service @given time
@given price
shifts supply curve
downards so more will
Firms increases output subisidies
be produced at every
by adding more units of
price
variable factor to it's
Why?? Gov. intervention

Supply
fixed factor and output/
unit will evenutally Non price determinants shits supply curve
diminish of supply: indirect taxes upwards, less produced
at every price

Total product (TP): tt.

output that a firm demand will increase
produces using it's fixed and price will increase,
+variable factor in a will start to withold
given time period stock from the market
Law of diminishing
returns producers make to supply mroe for the
Expectations about decisions based on future
Average Product (AP):
future prices what their expectations
output that is produced
of future prices
on average by each unit if they think the price
of the variable product. will fall in the future
AP= TP/V ten they will reduce
V= nbr of units of the their supply
variable factor

improvement sin
Marginal Product (MP) = Changes in technology technology should elad
change in TP/change in to an increase in supply
V

Weather or natural ie: weather has an

disasters impact on agriculture

PES=0 -> change in $$

% change in qtty
supplied / % change in
price
has no effect on the
qtty. supplied
if 0-1 -> inelastic supply

1- .. -> elastic

PES
how much costs rise as costs rise, producers
output is increased will try to raise supply

if you measure it
throughout more time
Time period considered than it will be more
Determinants
elastic. long run > short
> immediate

if you store a high level

of stock (inventory)
ability to store stock then you will be able to
react to a price increase
(PES relatively elastic)