Class Thirty

* Why do supply curves slope up?

i. Diminishing retunes- its harder to make more; cheaper to grow the first 10 arces of land than next 10.

ii. Additional factors of production; if any additional factors of production have diminishing returns, you incur those returns.

I. What can you read?

(1)individual cost

(2) Total costs

(3) Total revenue: PxQ

(4) Producer surplus

II. What changes supply?

i.                 Own price: “quantity supplied”

ii.               Something else:

“Supply shifts”

III. Supply Elasticity

 N=%Delta Q/%Delta Price, >1 elastic; <1 inelastic

*Change in supply:

i. Cost (workers, energy)

ii. Technology changes

iii. Substitutes

iv. Expectations