ECON101 Lecture : Supply

• School: University of Waterloo
• Department: Economics
• Course: ECON101
• Professor: Emanuel Carvalho

Document Summary

Supply: the quantity of a commodity that firms/producers would sell at each price defines the supply of the commodities: Sc = f (pc, cf, efp, poc, fn, t) assume constant. Cost of factory production, number of firms, technology. Relationship: quantity supplied is directly related to the price of the commodity. Suggests that: pc [goes up] qsupplied [goes up, pc [goes down] qsupplied [goes down] Price of commodities: change in pc causes the movement from one point to the next along the supply curve; An increase in quantity supplied reflects a movement up & along the supply curve caused by an increase in price . A decrease in quantity supplied reflects a movement up & along the supply curve caused by an decrease in price . If the costs of the factory of production increase, firms would decrease the amount of supply at each cost.