What you’ll learn6 learning objectivesChoose one objective for a focused lesson, or study the complete topic.2.2.1Law of supply• Supply shows the relationship between price and quantity supplied• Quantity supplied usually rises as price rises, ceteris paribusSyllabus objective2.2.2(HL)—Assumptions behind supply• The law of diminishing marginal returns helps explain rising production costs• Increasing marginal costs help explain the upward-sloping supply curveSyllabus objective2.2.3Supply curve• Supply can be represented by an upward-sloping supply curve• Diagram: upward-sloping supply curveSyllabus objective2.2.4Individual and market supply• Market supply is derived from individual producers' supply• Supply analysis distinguishes firm behaviour from total market behaviourSyllabus objective2.2.5Non-price determinants of supply• Supply shifts with factor costs, related goods prices, indirect taxes, subsidies, future price expectations, technology, and number of firms• Related goods include joint and competitive supply casesSyllabus objective2.2.6Movements and shifts in supply• A price change causes movement along a supply curve• Non-price determinants shift the supply curve• Diagram: movements along and shifts of the supply curveSyllabus objective
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