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Nonmarket Issues

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Submitted By RayanMRabie
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SECTION

3
OBJECTIVES
In Section 3, you will

What Factors Affect Supply?
KEY TERMS change in quantity supplied, p. 146 change in supply, p. 148 input costs, p. 148 labor productivity, p. 149 technology, p. 149 excise tax, p. 149 regulation, p. 150

TA K I N G N O T E S
As you read Section 3, complete a chart like this one showing each factor that causes change in supply. Use the Graphic Organizer at Interactive Review @ ClassZone.com
Factor That Changes Supply Reason Why Supply Changes

• explain the difference between change in quantity supplied and change in supply • understand how to determine a change in supply • identify the factors that can cause a change in supply

Changes in Quantity Supplied
KE Y CON CE P T S

QUICK REFERENCE

Change in quantity supplied is a rise or fall

in the amount producers offer for sale because of a change in price.

The supply schedules and supply curves that you studied in Section 1 were created using the assumption that all other economic factors except the price of tomatoes would remain the same. If all other factors remain the same, then the only thing that influences how many tomatoes producers will offer for sale is the price of those tomatoes. The supply curve shows that pattern. In Chapter 4, you learned the difference between change in demand and change in quantity demanded. Change in quantity demanded is shown by the points along an existing demand curve, while change in demand actually shifts the demand curve itself. Similarly, the different points on a supply curve show change in quantity supplied. Change in quantity supplied is an increase or decrease in the amount of a good or service that producers are willing to sell because of a change in price.

A change in the price of bicycles. . .

. . . causes a change in the quantity supplied.

146 Chapter 5

E XAM P L E

Changes Along a Supply Curve

Each new point on the

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