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changes in supply
Transcript of changes in supply
(think of price and cost) a supplier sets output at the most profitable level.
(price is equal to marginal cost) If costs of inputs rise, marginal cost will rise and in turn the firm will not be as profitable. If a firm cannot control price, what is the only solution?? 2. Technology input cost can drop with the introduction of new technology. B. Government's Influence on Supply can raise or lower the cost of producing goods 1. Subsidies
a gov. payment that supports a business or market 2. Taxes
excise tax- tax on the production or sale of a good 3. Regulation
gov. intervention in a market that affects the production of a good what are some examples of regulations? C. SUPPLY IN THE GLOBAL ECONOMY a raise in wages of workers in countries exporting goods to U.S. will lower the supply of goods imorted by U.S.
give four examples of shifts in supply. two for decrease in supply and two for increae in supply D. OTHER INFLUENCES ON SUPPLY 1. firm's expectations of future prices affect their output decsions
2. supply of goods increases with number of firms making the good a.future expectations with farmers b. number of suppliers of food