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1) How many substitutes can you think of for the following products? Speedos Cinema tickets Pencils
2) How many compliments can you think of for the following products?
Bananas
Macbook pros Haircut
Extension of supply
Contraction of supply
Supply is the quantity of good or service that a producer is willing and able to supply onto the market at a given price in a given time period.
Boggle
How many words can you make from the following letters? The words must be at least three letters in length
PPSLUY
Questions-Chapter 4
In the igcse textbookcomplete the getting started questions Complete question 1
Shift in Supply
You should Understand why supply curves shift Explain shifts in supply curves using a diagrams
Key Concepts
Indirect tax Government subsidies
Indirect Taxes
A government tax on a good or service Example being Value Added Tax
Government Subsidies
Government financial assistance to firms
On your whiteboards
See if you can think of five factors affecting the market supply of milk
On your whiteboards
See if you can think of five factors affecting the market supply of milk 1. the price of raw milk from farmers 2. productivity in milk industry 3. the number of suppliers in the industry
On your whiteboards
Draw what will happen in the following scenarios; 1) A new fertilizer has been developed that increases yields 2) The price of sugar increases 3) Starbucks cafes begin to expand their operations in China and India. 4) The company Fair trade increase their funding to Kenyan farmers. 5) The US reduces their import taxes for products from developing countries.
Market price
To understand:
How a market price is determined The meaning of equilibrium To understand how to calculate total revenue To understand why there may be excess supply and demand and how the market clears.
Equilibrium
Market clearing price Excess demand Excess supply Total revenue
Equilibrium price
This is the price where SUPPLY IS EQUAL TO DEMAND. At the equilibrium price the producers sell all of their products and everyone who is willing and able to purchase the good can. Firms carry out market research to ensure that they set the correct price to reach equilibrium. They will not always set their price perfectly, but the price will move towards equilibrium over time. Q. How do firms gather information about the prices consumers are willing to pay?
Equilibrium price
Equilibrium price
Total revenue
Total revenue can be calculated by using the formula: PRICE X QUANTITY SOLD. You can show TOTAL REVENUE BY CREATING A REVENUE BOX Total revenue is not the same as Profits. Profits are calculated by using the following formula:
Total revenue
Excess supply
Excess demand
10
5
330,000
400,000
60,000
40,000
Questions
A) State and mark the equilibrium price on your graph B) What is the quantity of chocolate bars traded at this market price?