ECON101 Lecture Notes - Lecture 2: Cowhide, Marginal Cost, Opportunity Cost

• School: University of Waterloo
• Department: Economics
• Course: ECON101
• Professor: Corey Van De Waal

Document Summary

The quantity supplied of a particular good/service is the amount that producers plan to sell during a given period of time at a particular price. Supply curve: produ(cid:272)er"s willingness and ability to sell a good or service, at a price, at a particular time. Resources and technology determine what it is possible to produce. The law of supply says that, ceteris paribus, the higher the price of a good or service, the larger the quantity supplied will be, and vice versa. For a producer, the marginal cost equates to the opportunity cost of producing one more unit of a good or service. As the quantity of goods or services produced increases, the marginal cost of production of the goods or services also increases (producers want to at least cover its marginal costs when producing a good or service) Supply: the entire relationship between the quantity supplied and the price of a good.