Got started pretty quickly today.Recapping: equi-marginal utility. Also the optimizing rule or optimizing principle, which amounts to the same thing. Or, the maximizing rule, still the same thing. It all amounts to the rational consumer acting to maximize utility, and therefore only being willing to choose between alternatives with equal utility.
Supply, and quantity supplied. The supply curve is always a direct relationship. That is, the higher the price of the good or service, the greater the quantity of that good which will be supplied.
Supply is affected by availability and price of resources. There are the same factors of production which affect demand. Land, labor, capital, entrepeneurship. Technology also affects supply, as do taxes and subsidies. Number of suppliers affects supply.
Supply is different from quantity supplied. A change in quantity supplied is movement on the supply curve. A change in supply shifts the supply curve. In general, a change in price will only change the quantity supplied, while changes in other factors wil change supply.
Supply of a good and demand for a good will naturally reach an equilibrium. If you graph a good’s supply curve and demand curve on the same axis the two curves will intersect, because they have opposite slopes. The point of intersection is the equilibrium. That point represents a situation where the quantity of the good consumers are willing to buy at a price is the same as the quantity of that good producers are willing to sell at that price.
Elasticity of Demand is the tendency of demand to resist permanent changes due to a certain change in price. When discussing elasticity of demand, you are discussing how much a price change will change demand.