Supply

Marginal Product

Increase in output from additional unit of input

Law of supply

Quantity supplied increases when price of product increases

Perfectly competitive market

Many buyers/sellers, identical product, firms are price takers

Price Takers

Who decides if product is sold at market price or what doesn’t affect market price

Variable cost

Costs that vary based on output quantity

Fixed costs

Prices that stay the same

Total Cost

Variable cost + Fixed Cost

Market Supply Curve

Quantity of product supplied at each price

Diminishing Marginal Product

More input with fixed conditions will result in less output

What shifts supply curve?

Income, Productivity, Price of related products, Expectations, Type/# of buyers

Move along supply curve

Selling/price plans change;Change in Price.

Market Imperfections

Few buyers/sellers, selling unique product, loyal customers