Chap5

• Supply curve


  Shows how much of a good sellers are willing to supply at different prices
• Supply curve


  • Slopes up from left to right
  • If prices go up, supply will also go up
  • If prices go down, supply will also go down
• Reason for supply curve slope

  Profit - Sell at higher prices
• Fixed supply


  • Impossible for sellers to increase supply even when prices are higher
  • Example: Venues with specific capacity - cannot create more seats even if price of tickets is higher