MAE101 Lecture Notes - Lecture 1: Price Floor, Price Ceiling, Margarine
Document Summary
Price has stayed the same, there is now an increase in supply due too a change in specific variables (not price) . Price of the good- if the price of the good increases, sellers will be wiling too supply more so they can increase profits. Price of input- for example for ice-cream if the price of sugar rises, this means that it costs more too produce the ice-cream and therefore sellers supply less of it. This will shift the supply curve too the left and therefore less ice-cream will be supplied. Factor cost (total cost of production)- if the cost of producing ice-cream increases, suppliers will only be willing to sell less of it or even none of it at all. This will shift the supply curve too the left, reducing the supply. Number of suppliers- if for example two sellers of ice-cream were too retire today, the supply of ice-cream would fall, shifting the supply curve too the left.
