 To take effective notes from a PowerPoint

 To know the definition of supply

 To know what causes a movement along
the supply curve
 To know what causes a shift in the supply
curve
 To know what happens when there is
excess supply or a shortage
 To practise drawing demand and supply
graphs
 Draw two demand graphs to show the
situations shown below – write a
description of your graphs
› Demand for wellington boots in a long hot
summer
› Demand for mars bars when the price falls
by 10%
 sellers wish of a good that to possible
price. The quantity sell at each
 The quantity of a good that sellers wish
to sell at each possible price
 Goods will not be provided for nothing
 Businesses will not supply a good unless
the price is high enough to provide an
INCENTIVE (the profit motive)
 At higher prices it is more lucrative to
provide a good and suppliers will move
production from one good to another
and so increase supply of the more
profitable good
 A shift in demand will cause a
MOVEMENT along the SUPPLY curve
Price
D1
S
D

P1
P

0 Quantity
Q Q1
 Changes in technology
 If technology improves would the supply curve shift
to the right or the left? Sketch a graph to help you
prove your opinion
 Input costs
 If the price of inputs (raw materials) goes up what
will happen to supply? – Sketch a graph ....
 Government regulation
 What will happen to the supply curve if the Government
improves health and safety legislation – Sketch a graph
...
 Equilibrium price is the price at which the
quantity supplied equals the quantity
demanded
 It is where the DEMAND and SUPPLY
curve CROSS
 This happens when demand for a good
exceeds the amount being supplied
 Some buyers will be frustrated because
of the shortage
 They will offer MORE MONEY for the
good
 Price will rise
 The MARKET will CLEAR and move to
EQUILIBRIUM PRICE
Price

S
D

Pe

0 Quantity
Qs Qe Qd
 If the quantity supplied exceeds the
quantity demanded sellers have unsold
stock
 This is excess supply
 Sellers will reduce price to get rid of the
unsold stock (a sale)
 The MARKET will CLEAR – return to
equilibrium
 Use the graph to show a shortage to
help you
Price

S
D

Pe

0 Quantity
Qd Qe Qs