Summary
Highlights
Defining Change in Supply vs. Change in Quantity Supplied00:00:00
The video begins by differentiating between a change in supply and a change in quantity supplied. Supply refers to the entire supply curve, where a change in supply means a shift of the entire curve (either to the right and down, or left and up). Quantity supplied, however, refers to a movement along a single supply curve due to a change in price.
Example 1: Government Price Cap on Gas00:02:29
The first example discusses a government-imposed price cap on gasoline. If the price cap is below the current market price, it causes a movement along the existing supply curve to a lower quantity supplied. This is a classic case of a change in quantity supplied, as the curve itself does not shift.
Example 2: Increased Cost of Refining Gas00:03:41
Next, the video explores the scenario where the price of refining gasoline increases. This increase in production cost affects all suppliers across the board, regardless of price. This would result in a change in supply, causing the entire supply curve to shift to the left and upwards, as suppliers would either demand a higher price for the same quantity or supply less at the same price.
Example 3: Decreased Property Tax on Gas Stations00:05:15
Finally, the video considers a decrease in property tax for gas stations. This reduction in operating costs allows suppliers to either offer the same quantity at a lower price or supply more at the same price. This situation also leads to a change in supply, causing the entire supply curve to shift to the right and downwards.