Supply

Key concept indicators

• Construct a supply schedule for an individual firm.
• Draw a supply curve for a firm.
• Recognise that producers will respond to internal factors (such as, changes in the price of the good/service itself, changes in the price of other goods/services produced by the firm, changes in production costs, changes in technology and productivity).
• Recognise that producers will respond to external factors (such as, environmental issues - for example, acts of nature, sustainability; political decisions - for example, subsidies, sales taxes; trade restrictions - for example, quotas, tariffs; cultural obligations - for example, resource ownership).
• Illustrate a change in price as a movement along a supply curve (that is, a change in quantity supplied) and using this to support explanations of producer responses.
• Illustrate a change in a non-price (internal or external) factor as a shift of a supply curve (that is, a change in supply) and using this to support explanations of producer responses.
• Explain how a producer will respond to a change in price of a good/service in a market and the flow on effects of this response for the producer.
• Explain how a producer will respond to a change in a non- price (internal or external) factor affecting supply and the flow on effects of this response for the producer.

Possible context elaboration

Local firm that your students are interested in (or have a connection with)

Visit a local firm to investigate the effect of price and non price factors affecting that firm’s supply. Follow up the trip using newspaper articles or TV current events as a stimulus to identify non-price (internal and external) factors affecting this firm’s supply. If possible get the firm owner to say how he/she would respond to these events so the student can see the theory working in the real world.

Last updated May 9, 2013

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