Transcript The Law of Supply

The Law of Supply
Activities
You may refer to your notes.
Please do not use the text book for these
activities.
1) Write your own definition of supply 1 minute
Accurate Answer follows:
Supply is the quantity of a good or service which
a seller is willing to provide at a particular
price over a particular time period.
2) What is the law of supply?
Write your own understanding of the law of supply 1
minute
Accurate Answer follows:
The supply of a good is a function of its own
price. Other things equal, the higher the price
of a product the more the sellers will supply.
There is a positive relationship between price
and quantity supplied.
A supply schedule and supply curve
Suppose seller supplies soy sauce by the litre– if
the price is 1 euro, the supplier will not supply
any.
 If the price is increased to two euros, the seller
will supply 5 litres. For every extra euro, the
seller will supply an additional 5 litres.
1) Draw a supply schedule from 1 to 6 euros.
2) Draw a graph to show the supply curve.
3) Why might a movement along the curve occur?
4) When such a movement occurs, what do we say
has happened?
5) Brainstorm the factors other than price that will
affect supply. Think of as much as possible.

The determinants of supply
Qsx = f{ Px,Ps,Pf, G, technology, weather,
expectations of the firm}
Sketch the impact on a supply
curve for the following and state
which factor was involved.:
1)
2)
3)
Owner of herd of goats. Supplies goats
milk to the market. There is a rise in
price of goats’ cheese. How does this
affect supply curve for goats’ milk?
Supplier of newspapers. The price of
newsprint increases.
Supplier of newspapers. Journalists cost
less to employ.
What is the impact on a supply
curve for the following and state
which factor was involved.:
4) Supplier of coffee. A severe frost occurs.
5) Supplier of mobile phones. Improvements
in mobile phone networks occur
throughout the country.
6) In Italy, train travel is subsidised by the
government. Supply of train services?
7) In Sweden, alcohol is highly taxed. Supply
of bottles of vodka at any given price.