INSERT DIAGRAM HERE.
It is extremely important to understand the difference between supply and quantity supplied.
Supply
• refers to the entire relationship between prices and the quantity of this product supplied at each of these prices.
• should be thought of as "the supply curve."
Quantity Supplied
• refers to one particular point on the supply curve (not the entire curve).
• refers to how much of the product is supplied at one particular price.
• is the horizontal distance between the vertical axis and the supply curve.
An increase in supply versus an increase in quantity supplied
With an increase in supply:
• the supply curve shifts to the right.
• at every possible price, a greater quantity is supplied.
An increase in supply might be caused by:
• an increase in the number of sellers.
• a reduction in the cost of inputs (such as labor or electricity).
• a technological innovation that increases output (such as the development of disease resistant crops).
• unusually good weather (for an agricultural product).
• expectations (e.g., that the price will be lower in the future).
With an increase in quantity supplied:
• the price of the product increases.
• there has been a movement from one point on the supply curve to another point (further to the right) on the same demand curve.
An increase in quantity supplied is caused by:
• an increase in the price of the product
A supply curve illustrates how much the quantity supplied changes when the price changes.
A change in quantity supplied is represented as a movement along a supply curve.
In the diagram below, there is an increase in the quantity supplied from two to four when the
price of a hamburger rises from $2 to $4. This is illustrated by the movement along the supply curve from point B’ to point D’.
Figure 8. An illustration of an increase in quantity supplied. There is a movement along the supply curve, but the supply curve does not shift. In this graph, there is a change is the quantity supplied, but supply does not change.
Joseph Schumpeter's Business Cycles
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Business Cycles
The link above takes you to a pdf file of Joseph Schumpeter's book.
14 years ago
this helped heappppssss
ReplyDeletethanks so much!
♥
completely useless
ReplyDeleteUmm, wouldn't there be a decrease in Quantity Supplied if the price of a product increased because less people would be likely to purchase the product? Confused.
ReplyDeleteWe talking about the supply-side here , not demand
DeleteYes there will be a decrease in quantity supplied.....as u said less people would be likely to purchase the product
DeleteThere will be an increase in supply as it is from the producers point of view.The demand will decrease if the product is price elastic.
DeleteNo, because the relation must be based on price-quantity... not # buyers-quantity. and the higher the price of a product out there, the more able and willing producers will be to sell that product, as it's more profitable to producers; and thats why the quantity supplied will increase.
ReplyDeleteGreat! Thanks
ReplyDeleteThanks!
ReplyDeleteits really helpful for me... thank u
ReplyDeletei dont understand pls elaborate more.....what will happen if the changes in quantity demanded versus quantity supply??
ReplyDeleteu lozer head
ReplyDeleteThanks alot for this.... It helps me in my economics study.
ReplyDeleteThanks so much for sharing your knowledge. You were very helpful!
ReplyDeleteThanks much ......very useful
ReplyDeletethanks for sharing those informations .. . it really helps me a lot .
ReplyDelete"relation must be based on price-quantity... not # buyers-quantity" this word relieved my head ache it all makes sense now. I am glad I read further down :)
ReplyDeletefuk thats so confusing zzz.
ReplyDeleteLove this! Thank you for making economics simple for an Artist mind.
ReplyDeleteCool :) Thanks for this simply info.
ReplyDeleteTHIS HELPED ME SO MUCH !!!!!!!! Thank you !
ReplyDeleteHeyy thank you lots too i kinda understand now so basically suply is refering to the whole curve
ReplyDeleteand quantity supplied is like one point of the curve right