Period 5Daily Writing Prompt

What does it mean when supply is elastic?

Essential Question

• How much of a good or service should a business produce?

Production Costs

• Fixed Cost – cost that does not change, no matter how much of a good is produced.–Ex. Rent, salaries, machine

repairs

Production Costs

• Variable Costs – Costs that rise or fall depending on the quantity produced.–Ex. Electricity, heat

• Total costs = fixed costs

Check for Understanding

• Give an example of a fixed cost and a variable cost of a bakery.

Shifts in the Supply curve

Decrease in Supply – price remains the same, but supply decreases

• Price remains the same, but supply decreases

Government’s influence on supply• Government can encourage or

discourage production

• Subsidy – a government payment that supports a business or market.

• Excise tax – a tax on the production or sale of a good. –Examples?

• Regulation – government intervention in a market that affects the price, quantity, or quality of a good.–Ex. Automobiles – pollution, MPG

standards

Government’s influence on supply

Future Expectations of Prices

• If suppliers expect prices to rise, they will store their goods.

• If suppliers expect prices to fall, they will place goods on the market immediately

Do Now

• Grab a textbook• Answer questions 1-3 & 5 on

pg. 120• ***Those absent yesterday

can also work on Anticipation Guide***

Period 5Daily Writing Prompt

What is regulation?

Heads up again…

• Quiz tomorrow – Chapter 5, Section 1

• FTF

Cablevision vs. FOX1) What is the issue being discussed in this

article?2) How much money is FOX asking for?3) What different incentives are present in

this situation?4) How could availability of substitutes

influence demand in this situation?5) Could the government intervene to solve

this problem?6) Who is to blame???