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-The amount of any good, service, or resource that people are willing and able to sell during a specified period at a specified price
- For example, when the price of spring water is $1.50 a bottle, a spring owner decides to sell 2,000 bottles a day. The 2,000 bottles a day is the quantity supplied of spring water by this individual producer.
-represents a specific good at a specific price.
-Quantity supplied is affected by price, but
supply itself can be affected by several factors. Among those factors are the cost of related goods, the prices of resources (such as what it costs to manufacture the item), the number of sellers, and worker productivity.
-one quantity at one price.
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b. supply, lower
The supply curve for gasoline shows the relationship between the price of gasoline and the quantity of gasoline supplied by production, assuming that all the determinants of supply are held constant. The following list displays determinants of supply, which are the factors that affect the quantity of gasoline producers want to sell at a given price:
FACTORS THAT DETERMINE SUPPLY
-Price of inputs
-Production technology
-Number of
producers
-Expectations of producers
Therefore, if the price of gasoline changes, the result is a movement along the supply curve from the old place to the new one. However, if a change occurs in any of the factors that determine supply, such as the discovery of a large new reserve of crude oil, the result is shift of the supply curve.
In this case, the supply of gasoline increases because of the new oil reserve causing the equilibrium price to decline.
The price of coffee rose sharply last month, while the quantity sold remained the same. Each of five people suggests an explanation:
Tom: Demand increased, but supply was perfectly inelastic.
Dick: Demand increased, but it was perfectly inelastic.
Harry: Demand increased, but supply decreased at the same time.
Larry: Supply decreased, but demand was unit elastic.
Mary: Supply decreased, but demand was
perfectly inelastic.
Who could possibly be right?
a. Tom, Dick, and Harry
b. Tom, Dick, and Mary
c. Tom, Harry, and Mary
d. Dick, Harry, and Larry
e. Dick, Harry, and Mary
In a market with a binding price ceiling, an increase in the ceiling will ________ the quantity supplied, ________ the quantity demanded, and reduce the ________.
a. increase, decrease, surplus
b. decrease, increase, surplus
c. increase, decrease,
shortage
d. decrease, increase, shortage