Microeconomics · free preview
Opportunity Cost and the Supply Curve
A supply curve is every seller's opportunity cost stacked in ascending order, a higher price summons higher-cost producers, and the curve shifts when costs or technology change.
1. Sellers have reservation prices too
Sellers have reservation prices too
2. The curve is the cost list, drawn
The curve is the cost list, drawn
3. What shifts the whole curve
What shifts the whole curve
4. An algebraic form
An algebraic form
5. Who sells at a given price
Five sellers have marginal costs per jar of honey of 12, 18, 25, 33 and 42 dollars. At a market price of 30 dollars, how many jars are supplied, and which seller is the marginal one excluded?
6. A cost shock
A fuel price surge raises every beekeeper's delivery cost by 6 dollars per jar, on top of the original marginal costs of 12, 18, 25, 33 and 42 dollars. What happens to the supply curve?
7. Quantity supplied after the cost cut
A market supply curve is initially Q = 2P, where Q is jars per week and P is dollars per jar. A technology change makes production cheaper so that the new supply curve is Q = 2P + 30. Compute the quantity supplied at a price of 20 dollars on the new curve and write the number.
8. Counting the sellers
Four sellers have marginal costs per jar of 10, 16, 22 and 30 dollars. At a market price of 25 dollars, how many jars are supplied?
9. Which way does supply turn
Which event shifts the supply curve of honey to the left?
10. Quantity supplied by formula
A market supply curve is Q = 2P, where Q is jars per week and P is dollars per jar. Compute the quantity supplied at a price of 30 dollars, and write the number.
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