Sunday, May 11, 2008

Supply vs. Quantity Supplied


It is extremely important to understand the difference between supply and quantity supplied.

• 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.


  1. this helped heappppssss
    thanks so much!

  2. completely useless

  3. Umm, 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.

    1. We talking about the supply-side here , not demand

  4. No, 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.

  5. its really helpful for me... thank u

  6. i dont understand pls elaborate more.....what will happen if the changes in quantity demanded versus quantity supply??

  7. Thanks alot for this.... It helps me in my economics study.

  8. Thanks so much for sharing your knowledge. You were very helpful!

  9. Thanks much ......very useful

  10. thanks for sharing those informations .. . it really helps me a lot .

  11. "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 :)

  12. fuk thats so confusing zzz.

  13. Love this! Thank you for making economics simple for an Artist mind.