You've mastered demand curves and elasticity! Now let's explore the other side of the market - supply curves. These show what sellers offer at different prices.
Remember when we said supply curves typically slope upward? Time to understand why!
Engagement Message
What does an upward-sloping supply curve tell you about sellers?
Supply curves represent sellers' willingness to produce at different prices. Think of a bakery owner deciding how many loaves to bake based on bread prices.
At $2 per loaf, maybe 50 loaves. At $4 per loaf, maybe 100 loaves.
Engagement Message
What relationship do you notice between price and quantity supplied?
Supply curves slope upward because of rising marginal costs. The first few units are cheap to produce, but each additional unit costs more.
Your bakery's first 50 loaves use regular staff. The next 50 require overtime pay - higher cost per loaf.
Engagement Message
Why would overtime make additional loaves more expensive?
Here's how to read a supply curve: at any price point, the curve shows the maximum quantity sellers will offer. Higher prices make previously unprofitable production worthwhile.
The supply curve reveals the cost structure of the entire industry.
Engagement Message
If pizza prices doubled, what would happen to the number of pizza shops?
Like demand curves, supply curves shift when non-price factors change. But supply shifters are different - they're mostly about production costs and business conditions.
When production gets cheaper or easier, supply shifts right. When it gets more expensive, supply shifts left.
Engagement Message
Can you think of one factor that could make production easier (and shift supply right)?
