Econ 200
Notes on Supply

The law of supply:
When the Px increases, the quantity of x supplied increases.
When the Px decreases, the quantity of x supplied decreases.

Two explanations for the law of supply:
(1)  Ability:  when the price of x goes up, revenue increases, ceteris paribus, and producers can buy more resources and can therefore produce more final goods.
(2)  Willingness:  when the price of x goes up, ceteris paribus, profit increases, and other alternatives for investment (i.e. opportunity costs) become less attractive, pulling more resources into the production of x.
 

The supply curve or schedule:
A schedule showing the amount of a good that producers are willing and able to
sell at various prices during a specific period of time.

The supply function:

Qx supplied = f( Px, technology, price of resources, profit expectations, time)
 

The Supply Curve (Graphically):

Just like with the demand curve, when the Px changes, we move along with curve.
When any other independent variable changes, we shift the curve.