3/11 - Supply. AIM : How does the law of supply work? Opener : Poll your classmates on the following question. Then present the responses on a graph.
(Remember, this is ceteris paribus – the assumption that everything stays constant except for the price.)
Consider this apple orchard
Why do marginal returns initially increase, but then start to decrease, and even become negative?
Marginal Product of Labor – Band 6
Is there enough information on this chart to determine how many beanbags to produce?
What additional info might you need?
Revenue = money the firm gets from selling its product.
Profit = Total revenues minus total costs