Determinants of quantity supplied

profit = total revenue - total costs
objective: constrained profit max
   
1. price of good or service
  direct relationship between price and profit
 
2. cost of production of good or service
wages
  inverse relationship cost of input and profit
productivity / talent
direct relationship between productivity and profit

 

 

 

 

 

 

 

 

 

 

 

"CETERIS PARIBUS"

Qs = Q [ P, w , t ]

 

 

 

 

 

 

 

 

 

 

 

 

Supply curves

 

 

 

 

 

 

 

 

 

 

 

Market Equilibrium

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum Wage

 

 

 

 

 

 

 

WORKERS LAID OFF C TO A

NEW LABOR FORCE ENTRANTS C TO B

 

UNEMPLOYMENT RATE

U-RATE = (B - A) / b

OR

u = (LF - E) / LF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price Controls on Natural Gas

 

 

 

 

 

 

 

 

 

 

 

 

 

 

off/peak-load pricing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

crude oil price cycle

 

 

 

 

 

 

 

 

 

 

 

 

Partial Passing Through

 

 

 

 

 

 

 

 

 

 

 

 

 

Complete Pass through

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade War