2006-07-26 20:08:07 · 7 answers · asked by siddrules 1 in Social Science ➔ Economics
First of all, an inferior good wouldn't cause the supply curve to be negative because that's the demand side of the equation. If I were selling an inferior good and the price rose, I'd still be willing to sell it for more, so the supply curve would still be positive.
But as a consumer, I wouldn't be willing to pay more for an inferior good, so I would buy less as the price increased.
Remember, a supply curve shows how much a supplier would be willing to sell at different prices. Normally, the supplier would be willing to sell more as the price increased, which gives you the positively-sloped "normal" supply curve.
So the only situation I can think of for a negatively-sloped supply curve is a supplier who was deliberatly willing to sell less as prices rose.
2006-07-30 00:48:29 · answer #1 · answered by msoexpert 6 · 0⤊ 0⤋
Ignore the first answer; he's talking about demand.
The only example I can think of is labor, where part of the supply curve can be downward sloping. For example if your salary was increased you might work more (supply more labor), but at some point, it's going to be so high that you will actaully work less in order to have more leisure time. For example, if you were paid $1 million per hour, you would probably work only a few hours here and there and spend the rest of the time enjoying yourself. If you made $100 dollars per hour, you would probably work significantly more hours.
2006-07-27 13:10:53 · answer #2 · answered by Top 99% 3 · 0⤊ 0⤋
Inferior goods. As the price of affordable brown bread goes down, consumers can use the savings to buy expensive bread. Instead of 3 brown loaves at 10 cents each, I can buy two at 5 cents and buy one of the other bread at 20 cents.
2006-07-27 03:43:07 · answer #3 · answered by Woody 6 · 0⤊ 0⤋
Economies of scale. Most industries operate well past the point of diminishing returns; some, however, take their time getting there, so they enjoy economies of scale for long periods of time.
Typically, an increasing-returns industry is one that requires substantial investment in distribution infrastructure (electricity, water, natural gas, early telephone).
2006-07-27 13:26:42 · answer #4 · answered by NC 7 · 0⤊ 0⤋
It is possible for
1) Inferior goods
2) Decreasing cost industry
check out the link
http://www.us.oup.com/us/pdf/microecon/ch09ppt.pdf
2006-07-27 05:00:08 · answer #5 · answered by convert 2 · 0⤊ 0⤋
Under no condition. At least not in reality.
2006-07-27 04:31:40 · answer #6 · answered by h88 3 · 0⤊ 0⤋
when needs go down
2006-07-30 14:43:14 · answer #7 · answered by Anonymous · 0⤊ 0⤋