Below is the amount of widgets that Adam, Robert, and Karl are each willing to make at three different prices.

Producer

$1 per widget

$2 per widget

$3 per widget

Adam

3

5

7

Robert

5

6

7

Karl

3

6

9

a. What is the primary incentive of each producer to make widgets?

b. What would happen to the supply of widgets if there was a technological advance that lowered the cost to make widgets? Explain.

c. Make a supply schedule for the whole market of widgets, based on these three suppliers.

d. Draw the market supply curve from the schedule in part (c). Label the curve S1.

e. On your graph from part (d), illustrate the effect of the technology advance on the supply of widgets. Label the new curve S2.

f. Assuming the market situation from part (b), and that producers will not charge less than $1, would the quantity supplied of widgets be more or less than 11 widgets? Explain.