Changes in Supply
Graphs
What shifts the supply?
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Government
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Subsidies: gov. payment that supports a business
or market.
Taxes: the gov. can reduce the supply of a good by
taxing it. Excise Tax
Regulation: Government Intervention in a
marketplace that affects the production of a good.
Technology
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Technology drops input costs.
Robots can replace human workers
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Any examples?
Number of Suppliers
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When more suppliers enter a market to
produce a certain good, the market supply of
that good will rise and the supply curve will
shift right.
Future Expectations on Price: what does the
future hold?
Natural Events/Disaster
International Conflicts
Answer
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Explain why a change that lowers the marginal
revenue (price) changes the quantity produced
in the same direction as a change that raises
the marginal cost of production.
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Lowering marginal revenue decreases the
incentive to produce. This is also the effect of
raising the marginal cost. Both result in less profit
for the producer.