I n t h I s c h a p t e r y o u w I l L

P
RICEOF
I
CE
-C
REAM
C
ONE
B
EN
J
ERRY
M
ARKET
$0.00
0
0
0
0.50
0
0
0
1.00
1
0
1
1.50
2
2
4
2.00
3
4
7
2.50
4
6
10
3.00
5
8
13

---

7 8
PA R T T W O
S U P P LY A N D D E M A N D I : H O W M A R K E T S W O R K
Ben’s Supply
Price of
Ice-Cream
Cone
Price of
Ice-Cream
Cone
ⴙ
Jerry’s Supply
0
1 2
3 4
5 6
7 8
9 10 11 12
Quantity of
Ice-Cream Cones
$3.00
1.50
2.00
2.50
1.00
0.50
0 1 2 3 4 5 6 7 8 9 10 11 12
Quantity of
Ice-Cream Cones
$3.00
1.50
2.00
2.50
1.00
0.50
Price of
Ice-Cream
Cone
Quantity of
Ice-Cream Cones
0
Increase
in supply
Decrease
in supply
Supply curve, 
S
3
Supply
curve, 
S
1
Supply
curve, 
S
2
F i g u r e 4 - 7
S
HIFTS IN THE
S
UPPLY
C
URVE
.
Any change that raises the
quantity that sellers wish to
produce at a given price shifts the
supply curve to the right. Any
change that lowers the quantity
that sellers wish to produce at a
given price shifts the supply
curve to the left.

---

C H A P T E R 4
T H E M A R K E T F O R C E S O F S U P P LY A N D D E M A N D
7 9
Table 4-6 lists the variables that determine the quantity supplied in a market
and how a change in the variable affects the supply curve. Once again, price plays
a special role in the table. Because price is on the vertical axis when we graph a
supply curve, a change in price does not shift the curve but represents a movement
along it. By contrast, when there is a change in input prices, technology, expecta-
tions, or the number of sellers, the quantity supplied at each price changes; this is
represented by a shift in the supply curve.
In summary, 
the supply curve shows what happens to the quantity supplied of a good
when its price varies, holding constant all other determinants of quantity supplied. When
one of these other determinants changes, the supply curve shifts.
Market Supply
(
3 
4)
Price of
Ice-Cream
Cone
0
1 2
3 4
5 6 7 8 9 10 11 12
Quantity of
Ice-Cream Cones
$3.00
1.50
2.00
2.50
1.00
0.50
ⴝ
F i g u r e 4 - 6
M
ARKET
S
UPPLY AS THE
S
UMOF
I
NDIVIDUAL
S
UPPLIES
.
The
market supply curve is found
by adding horizontally the
individual supply curves. At a
price of $2, Ben supplies 3 ice-
cream cones, and Jerry supplies
4 ice-cream cones. The quantity
supplied in the market at this
price is 7 cones.
Ta b l e 4 - 6
T
HE
D
ETERMINANTS OF
Q
UANTITY
S
UPPLIED
.
This table
lists the variables that can
influence the quantity supplied in
a market. Notice the special role
that price plays: A change in the
price represents a movement
along the supply curve, whereas
a change in one of the other
variables shifts the supply curve.