[Anonymous]

According to CPAexcel, “increasing production normally results in higher costs. Producers normally are willing to provide goods and services only at higher prices.” And according the graph CPAexcel has, there is a higher quantity at a higher price. This doesn’t make sense. Wouldn’t more expensive stuff be in less quantity? I.e. there would be more Toyotas (low cost) then there would be Mercedes-Benz (high cost). Anyone else thinking what I’m thinking?

[Anonymous]

Also, here's the CPAexcel text for this topic:

I. Individual Supply

A. A supply schedule for an individual producer shows the quantity of goods or services that the producer is willing to provide (supply) at alternate prices during a specified time, ceteris paribus. The graphic representation of a supply schedule presents a supply curve, which normally has a positive slope;

B. At P2, the higher price, the quantity supplied (Q2) is greater than the quantity supplied (Q1) at P1, the lower price. Producers normally are willing to provide higher quantities of goods and services only at higher prices because higher production costs are normally incurred in increasing production in the short run. The higher production costs (known as the principle of increasing cost) occur because the additional resources used to increase production typically are not as efficient in producing the commodity as the resources previously used

[Anonymous]

I think you're confusing supply and demand.

“Wouldn't more expensive stuff be in less quantity?”

Suppliers would be willing to PROVIDE more stuff if they can get more money for it. But the DEMAND at higher prices is less.

Also, Toyotas and Mercedes are apples and oranges. You need to think in terms of apples and apples: Toyota will be more willing to supply Corollas as a higher price, but consumer will be less willing to buy Corollas at a higher price. Mercedes is a different product so you can't think of them in the same way.

[Anonymous]

I guess that makes sense. Thanks man. And wow, we started our CPA journey around the same time and you're almost finished, and I'm 0 for 2 and waiting for my AUD score 🙁

[Anonymous]

If it DOESN'T make sense tell me (really) and I'll try to say it differently.

And it's not how fast you do it, it's THAT you do it!

[Anonymous]

It makes sense (both the supply/price explanation as well as the it matters that you finish). The AUD score release in about a week will show if I've made any progress so far.

[Author]

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