Changes in Supply and Market Equilibrium

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Objective

I can analyze how changes in supply affect market equilibrium.

Part 1 of 3

Key concepts

3 concepts

  1. 1

    Supply refers to the quantity of a good or service that producers are willing and able to offer at various prices during a specific period.

  2. 2

    Factors that influence supply include production costs, technology, and the number of sellers in the market.

  3. 3

    When supply increases, the equilibrium price decreases, and the equilibrium quantity increases.

Part 2 of 3

Practice

3 questions

1

Explain how a decrease in the cost of raw materials would affect the supply curve for a particular good. Be sure to indicate the direction of the shift and the reasoning behind it.

2

Suppose a new technology is introduced that significantly increases the efficiency of producing smartphones. At the same time, the number of smartphone manufacturers decreases. Analyze the combined impact of these two changes on the equilibrium price and quantity of smartphones.

Part 3 of 3

Exit ticket

Quick comprehension check

Explain how an increase in the cost of raw materials would affect the market equilibrium price and quantity of a product. Be sure to specify whether supply increases or decreases.

Sample answer included in the free materials

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