Google
Friday 
August 28, 2015 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
Today's Index
Yesterday's Index
277.1

Help us compile the AmosWEB Free Lunch Index. Tell us about your last lunch.

Skipped lunch altogether.
Bought by another.
Ate lunch at home.
Brought lunch from home.
Fast food drive through.
Fast food dine in.
All-you-can eat buffet.
Casual dining with tip.
Fancy upscale with tip.

More About the Index
Best TV Sitcom of the 70s.

Happy Days.
The Brady Bunch.
M*A*S*H.
Welcome Back, Kotter.
The Patridge Family.
What? They had TV in the 70s.

VON THUNEN MODEL: A model of land use develop by Johann von Thunen that illustrates the trade off between land values and the distance from a central point of attraction. While originally applied to agricultural land use, the von Thunen model is commonly used to explain urban land use patterns. Two primary conclusions from the model are (1) that land values decrease as distance from the central point of attraction increases and (2) that different land use activities are contained in concentric rings equal distance from the central point of attraction based on the weight (or transportation cost) of the activity.

Visit the GLOSS*arama


LAW OF SUPPLY:

The direct relationship between supply price and the quantity supplied, assuming ceteris paribus factors are held constant. This economic principle indicates that an increase in the price of a commodity results in an increase in the quantity of the commodity that sellers are willing and able to sell in a given period of time, if other factors are held constant. The law of supply is an important principle in the study of economics.
The law of supply is the scientific relation between supply price and quantity supply that captures the supply side of the market. When combined with the law of demand the result is the market model. The market provides a powerful tool for analyzing exchanges, resource allocation, and efficiency.

What Does It Mean?

The direct relation of this law means that sellers who have ownership and control over resources are willing and able to sell more of a good if the price is higher and less of a good if the price is lower. From a scientific method perspective, this indicates that price causes quantity supplied. Or more specifically that a change in the supply price causes a change in the quantity supplied.

Working the Curve

Supply Curve
The law of supply is conveniently illustrated by a supply curve. In particular, it is illustrated by the positive slope of a supply curve, such as the one presented to the right. The positive slope of the supply curve means that higher prices are related to larger quantities and that lower prices are related to smaller quantities. Price goes up, quantity goes up. Price goes down, quantity goes down.

Looking Into Production

Insight into the law of supply is provided by the analysis of production possibilities and short-run production. The direct relation between supply price and quantity supplied can be tentatively explained through basic economic principles associated with each analysis.
  • Law of Increasing Opportunity Cost: This law states that as the production of one good is increased, moving along the production possibilities curve, then the opportunity cost (in terms of foregone production of the other good) increases. If sellers incur greater opportunity cost, then they need to receive a higher price, which generates the law of supply.

  • Law of Diminishing Marginal Returns: The law states that as the production of a good is increased, by the addition of a variable input to a fixed input, then the marginal product of the variable input declines. With this decline, more of the variable input is needed, which increases the cost of production. If sellers incur greater production cost, then they need to receive a higher price, which also generates the law of supply.

Many Exceptions

While the law of supply generally reflects what happens on the supply side of market, it is not a universal principle that applies to all markets under all circumstances. There are, in fact, numerous important exceptions to the law of supply. In particular, if the supply side of the market is controlled by small number of sellers (including a single seller), then the law of supply might not operate.

For example, monopoly, which is a market with a single seller, is not necessarily inclined to offer a larger quantity supplied even though the price is higher. Market control by the monopoly allows it to set the market price based on demand conditions, without cost constraints imposed from the supply side. Other market structures, including oligopoly and monopolistic competition, might have more competition, but market control can also negate the law of supply.

<= LAW OF INCREASING OPPORTUNITY COSTLEADING ECONOMIC INDICATORS =>


Recommended Citation:

LAW OF SUPPLY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2015. [Accessed: August 28, 2015].


Check Out These Related Terms...

     | supply schedule | supply curve | supply space | supply determinants | producer surplus | change in supply | change in quantity supplied | law of demand |


Or For A Little Background...

     | supply | supply price | quantity supplied | market | quantity | price | limited resources | economic analysis | exchange | scarcity | good | service | production | opportunity cost | ceteris paribus |


And For Further Study...

     | market supply | competition | value | production possibilities | competitive market | efficiency | exchange | law of increasing opportunity cost | law of diminishing marginal returns | marginal product | marginal cost | short-run production analysis |


Search Again?

Back to the WEB*pedia


APLS

State of the ECONOMY

Retail Sales
July 2015
$446.5 million
Down 0.6% from June 2015: U.S Census Bureau

More Stats

GREEN LOGIGUIN
[What's This?]

Today, you are likely to spend a great deal of time looking for the new strip mall out on the highway seeking to buy either a pair of gray heavy duty boot socks or a 50-foot blue garden hose. Be on the lookout for crowded shopping malls.
Your Complete Scope

This isn't me! What am I?

In the late 1800s and early 1900s, almost 2 million children were employed as factory workers.
"Anything's possible. You can be told you have a 90% chance or a 50% chance or a 1% chance, but you have to believe, and you have to fight. "

-- Lance Armstrong, cyclist

SEHK
Stock Exchange of Hong Kong
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2015 AmosWEB*LLC
Send comments or questions to: WebMaster