2.2 Supply

a. Define (using graphs as appropriate) the law of supply. b. Explain (using graphs as appropriate) the relationship between price and quantity supplied.

• A change in own-price causes a change in quantity supplied in the same direction and a movement along a supply curve.
• The market supply curve (schedule) is derived from the summation of individual supply curves (schedules). The market supply curve is upward-sloping.
• Enduring understanding MKT-3: Individuals and firms respond to incentives and face constraints.

Explain (using graphs as appropriate) producers’ (sellers’) responses to changes in incentives and technology.

• Changes in the determinants of supply can cause the supply curve to shift.
• Enduring understanding MKT-3: Individuals and firms respond to incentives and face constraints.