October 3, 2007

Factors that Change Supply

Posted in Supply & Demand at 3:56 pm by davidprudente

Tonight you should be working on completing your reading for chapter 4. As you read, remember that understanding what causes changes in the supply and demand curves is critically important. At this point, you should recall that a change in price is associated with a movement along a curve while changes in other variable will cause the curve to physically shift.

Here’s a handy mnemonic device to help you memorize what causes a supply curve to shift:

S- subsidies and taxes
T- technology
O- other related goods prices
R- resource costs
E- expected future prices
S- size of the market (# of firms)

I’ll give you extra-credit if you can come up with a mnemonic device for the causes of a demand curve shift.

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3 Comments »

  1. Adam said,

    Hey Mr. P,

    do u want us to post the mnemonic on your site or bring it to class?

    -Adam

  2. davidprudente said,

    Bring it to class.


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