### ECO 201 Cram Kit Bundle

Opportunity Cost & PPF
Supply & Demand
Elasticity
Surplus
Tax Incidence & DWL
Price Controls
Externalities
Types of Goods
Total Costs
Per-unit Costs
Market Structures

# Supply

Swag & Co is a company that makes only white sneakers.

We want to know how many white sneakers Swag & Co will produce at different prices. If white sneakers are selling for \$200, Swag & Co would make a lot of money so they would be willing to make (supply) 3 pairs at that price. At a price of \$150 they would not be making as much money so they would only make 2 pairs. At a price of \$100 they would barely be making any money selling white sneakers so Swag & Co would only supply 1 pair.

We can make Supply Schedule which shows the relationship between the price and the quantity supplied

Letâ€™s graph this table out. Our Y-axis is going to price; the same as it was when we graphed a demand schedule. Our X-axis this time will be quantity supplied.

When we plot our points, we get the following output...

At a price of \$200, Swag & Co is willing to supply 3 white sneakers. This point is shown as a red dot.

At a price of \$150, Swag & Co is willing to supply 2 pairs of white sneakers. This point is shown as a red dot.

At a price of \$100, Swag & Co is willing to supply 1 pair of white sneakers. This point is shown as a red dot.

...which results in the following linear relationship!

Notice how the supply curve is sloped upwards. This showcases a very key economic concept: Law of Supply!

The Law of Supply states that holding everything constant, when the price of a product increases, the quantity supplied increases.