π― Lesson Objectives
- π Define and explain the concept of 'quantity supplied' in economics.
- π‘ Understand the relationship between price and quantity supplied, known as the Law of Supply.
- π Analyze how quantity supplied is represented on a supply curve.
- π Distinguish between a change in quantity supplied and a change in supply.
π οΈ Materials Needed
- π Whiteboard or large paper
- ποΈ Markers or pens
- π Handouts with example scenarios (optional)
- calculators (optional, for price elasticity discussions)
β° Warm-up Activity (5 mins)
- π Ask students: "Imagine you own a small business selling custom-designed t-shirts. What factors would make you want to produce and sell *more* t-shirts?"
- π£οΈ Facilitate a brief class discussion, encouraging students to consider profit, cost, and market demand.
- π Prompt them to think about how the price they could sell the t-shirts for might influence their decision.
π‘ Main Instruction: Unpacking Quantity Supplied
Welcome, future economists! Today, we're demystifying a core concept: Quantity Supplied. Think of it as how much stuff producers are willing to make and sell.
What is Quantity Supplied?
- π¦ The specific amount of a good or service that producers are willing and able to offer for sale.
- π° Offered for sale at a particular price.
- β³ At a given point in time.
- π’ It's always a numerical value (e.g., 100 apples, 50 cars).
Itβs important to remember that quantity supplied is not just about what producers *can* make, but what they are *willing* to make given the market price.
The Law of Supply
The Law of Supply is a fundamental principle in economics that describes the relationship between price and quantity supplied. Simply put:
- β¬οΈ As the price of a good or service increases...
- π The quantity supplied by producers generally increases.
- β¬οΈ Conversely, as the price decreases...
- π The quantity supplied by producers generally decreases.
- π€ This creates a direct relationship between price and quantity supplied.
Producers are motivated by profit. A higher price means more potential profit, encouraging them to produce and sell more. A lower price means less profit, reducing their incentive to supply as much.
Visualizing with the Supply Curve
The supply curve is a graphical representation of the Law of Supply. It typically slopes upward from left to right.
- π It plots price on the vertical (Y) axis and quantity supplied on the horizontal (X) axis.
- π The upward slope illustrates the direct relationship: as price goes up, so does quantity supplied.
- β‘οΈ A change in quantity supplied is represented by a movement *along* the existing supply curve.
- π² This movement is caused *only* by a change in the good's own price.
Example Table: Apple Supply Schedule
| Price per Apple ($) | Quantity Supplied (Apples) |
|---|
| 1.00 | 100 |
| 1.50 | 150 |
| 2.00 | 200 |
| 2.50 | 250 |
In this table, as the price of apples increases from $1.00 to $2.50, the quantity of apples supplied by producers also increases from 100 to 250.
Key Formula (Implicit)
While not a complex formula, the relationship can be expressed functionally:
$$Q_s = f(P)$$
Where:
- $Q_s$ represents the Quantity Supplied.
- $P$ represents the Price of the good.
- $f$ indicates that Quantity Supplied is a function of Price.
π Assessment & Practice
Practice Quiz
Test your understanding with these questions:
- β If the market price for a popular video game console increases significantly, what would you expect to happen to the quantity of consoles supplied by manufacturers?
- π§ Explain the difference between 'quantity supplied' and 'supply' in your own words.
- π‘ A baker usually makes 50 loaves of bread a day. If the price of bread suddenly doubles, and all other factors remain constant, what is the most likely immediate action the baker will take regarding production?
- π§ Why does the supply curve typically slope upwards?
- π€ Provide an example of a situation where a producer might decrease their quantity supplied even if demand is high. (Hint: think about price.)
- π If a company sells 1,000 units of a product at $10 each, and then 1,200 units at $12 each, what economic concept is demonstrated by the change from 1,000 to 1,200 units?
- β
True or False: A technological advancement that makes production cheaper will cause a movement along the supply curve.
Answer Key
- βοΈ The quantity of consoles supplied would likely increase, as manufacturers are incentivized by higher profits.
- π 'Quantity supplied' refers to a specific amount at a specific price, representing a single point on the supply curve. 'Supply' refers to the entire relationship between various prices and the quantities producers are willing to offer, represented by the entire supply curve.
- π― The baker would most likely increase the quantity of loaves supplied to take advantage of the higher price and potential for increased profit.
- π― The supply curve slopes upwards because producers are motivated by profit; higher prices offer greater incentives to produce and sell more, reflecting the direct relationship of the Law of Supply.
- π A producer might decrease their quantity supplied if the market price falls below their cost of production or their desired profit margin, even if demand is present.
- π This demonstrates a change in quantity supplied, as the increase in units is directly tied to an increase in the product's price.
- π False. A technological advancement would cause a shift of the entire supply curve (a change in supply), not a movement along it, because it changes the willingness to supply at *all* price levels.