Jeannette Suarez.

1
CHAPTER 5

• Jeannette Suarez.
• Melissa Velazquez.
• Victor Feria.
• Rafael Medina.
• Kevin Sobalvarro.
• Ximena Lopez.
• Period 5.
• 3/25/11.

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Section 1
3
The Law Of Supply

• Basically the higher the price, the more of the
  product gets produced.
• Since the price goes up the consumer must want
  the goods more so its produced quicker

• http//econperspectives.blogspot.com/2009/07/suppl
  y-and-demand.html

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Market Entry

• Market entry means when something at the moment
  is hot and is making a lot of revenue other
  markets or business joins that market because
  they understand is doing really good and making
  its profit.

http//www.limchloe.com/International_Marketing.ht
ml
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The Supply Schedule

• The schedule shows an even amount of price range
  it gets higher and then the production of it.

Prices per slice of pizza Slices supplied per day
.50 100
1.00 150
1.50 200
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Supply Graph

• The supply graph
• Supply schedule get recorded, which creates a
  supply cure it s like a demand curve. But it
  measures the quantity of the good with the
  horizontal axis.
• A market supply curve is to curve the difference
  in two with two curves. It also shows how
  different suppliers with the same good with all
  different prices.

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Supply and Elasticity

• Elasticity measures how consumers will react to a
  change in a price.
• Elasticity of supply is based on the same
  concept, its the measure of the way suppliers
  respond to change in price.
• Elasticity of supply tells how firms will respond
  to changes in the price of a good.
• Example the change in gas.

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Elasticity of supply and time

• Elasticity of supply in the short run
• In a short run, supply is inelastic whether the
  price increases or decreases.
• When supply is elastic a small amount increases
  in price as a big effect on supply.
• An example can be when cotton farms cannot
  respond so fast to the increase of price with
  soybeans because of the time it takes to produce
  the cotton

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Elasticity in the long run

• A supply can become more elastic over time.
• Just like a demand, supplies can become more
  elastic if the supplier has a long time to
  respond to a price change.

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Section 2
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Labor and output

• The main question that an owner of a business has
  is how many people to hire for its business.
• The more people hired the more production is made
  by the company.

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Marginal product of labor

• The marginal product of labor is the total output
  that hiring one more worker gives you.

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Increasing marginal returns

• Increasing marginal returns is when you hire
  someone to specialize in something and it
  increases the production because theres no time
  wasted switching tasks.

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Diminishing marginal returns.

• This is when you start hiring too many people the
  production starts to decrease.

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Companies Objective

• A companies main objective behind all company
  decisions is how to maximize profits.
• Profits-total money made minus the total costs

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Profit

• The profit made is dependent on how much of a
  product the company makes and also how much they
  sell the particular product for
• Companies strive to find a level of output where
  they will end up making the most profit

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Marginal Cost

• Additional income for selling one more unit of a
  good.
• Good way to find the best level of output.
• The best level of output is when the marginal
  revenue is the same as marginal cost.

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Production

• When the price of something rises companies
  strive to increase production of that product.
• This is to maximize profits and an example of law
  of supply.

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Operating Cost

• The cost of operating a facility. It includes
  variable costs but not fixed costs.
• Fixed costs exist whether the factory is open or
  not.
• There are times when keeping a money losing
  factory open is the best choice.

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Section 3
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• Input Cost
• Some factors can affect the price levels.
• Any materials, machinery, or labor use to make a
  good will affect supply if the cost is changed.
• Effect of rising cost
• A supplier sets output where price is equal to
  marginal cost.
• Marginal cost includes the cost of the
  production.
• If the marginal costs rise the less profitable
  it can be.
• If a firm cant control the price, the
  production is cut until its equal.

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• Technology
• Technology can lower production costs in
  industries.
• Robots and computers can replace workers and
  therefore makes the workers get lower salaries.
• Technology lowers costs and increase supply at
  all price levels.
• Government Influence on supply
• Government has the power to affect the
  supplies of many goods by
• -Raising the cost
• - Lowering the cost
• Subsidies
• Subsidy is a government payment that supports a
  business or market.
• Government often pays a producer a set subsidy
  for the goods produced.
• Some countries an their government have their
  reasons for subsidizing producers. For example

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• -Europe Food shortage during WWII
• -France Farms, to protect the lifestyle and
  character.
• Government subsidizes manufacturers to protect
  young, grown industries from strong foreign
  competition.
• Taxes
• Excise tax- a tax on the production or sale of a
  good.
• Increases production costs and adds an extra
  cost.
• Excise taxes can sometimes discourage the
  government thinks are harmful.
• Regulation
• Regulation- government intervention in a market
  that affects the production of a good.
• Some regulations can increase the cost of
  manufacturing cars and reduce the supply. It can
  shift to the left.

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Sources

• Economics book
• http//www.google.com/images?hlensourcehpbiw
  1436bih715qmoneybtnGSearchImagesgbv2aqf
  aqiaqloq
• http//www.allbusiness.com/glossaries/input-cost/
  4943725-1.html
• http//www.habitationtips.com/index.php