Supply

1

5 Shifters of Supply

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SubsidiesIt is government

payment to support business

or market. Subsidies cause the supply of a

good to increase.

1. Input Prices2. Technology3. Expectations 4. Taxes &

Subsidies5. Number of

SellersChanges in PRICE

Stay on the Line

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Input Prices

Input Price Q.S.Input Price Q.S.

4

Technology

Technology Q.S.Technology Q.S.

5

Expectations

Expect Price Q.S.Expect Price Q.S.

(now)

(now)

Taxes & Subsidies

Taxes Q.S.Taxes Q.S.

Subsidy Q.S.Subsidy Q.S.

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Number of Sellers

# of Sellers Q.S.# of Sellers Q.S.

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If gas price goes from $4.99 down to $2.05, what is going to

happen to the gas supply?

Price

Quantity

S

Shift in Supply

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Price

Quantity

Price

Quantity

Increase in Supply Decrease in Supply

SS

Supply PracticeFirst, identify the determinant (shifter) then

decide if supply will increase or decrease

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Shifter Increase or Decrease Left or Right

123456

Supply Practice

Hamburgers1. Mad cow disease kills 20% of cows 2. Price of hamburgers increase 30%3. Government taxes burger producers4. Restaurants can produce burgers and/or

tacos. A demand increase causes the price for tacos to increase 500%

5. New bun baking technology cuts production time in half

6. Minimum wage increases to $20

1. Which Determinant (shifter)?2. Increase Or Decrease?3. Which Direction Will Curve Shift?

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