Supply
Each point on the curve: the cost of producing a unit. Price increases = more production = more quantity supplied (it costs more to make more).
Supply curves slope UP!
-This is because of the law of diminishing returns - its harder to make more/cheaper to grow the first 10 acres of corn than the next 10 (more fertilizer/water)
-Other factors - other factors that have law of diminishing returns
What changes supply?
-Price of the good changes as you move along the existing supply curve. Change in supply shifts curve.
-changes in factor (input) prices
-expectations
-technology
-changes in other markets
-elasticity
Price Elasticity of Supply - How much more will I produce when the price goes up?
m = %change in quantity supplied / %change in price of good
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