Friday, May 9, 2008
Supply is the relationship between various prices of a product and the corresponding quantity that producers are willing and able to sell at each of those prices.
The quantity supplied is the amount that producers are willing and able to sell at a particular price.
The law of supply states that, other things equal, the quantity supplied of a product increases when the price of the product increases.
A supply schedule is a tabular representation of supply.
Price of a Hamburger Quantity of Hamburgers Supplied
Table 2. An Example of a Supply Schedule
A supply curve is a graphical representation of supply. A supply curve can be a straight or curved line.) It is traditional in economics to place price on the vertical axis and quantity on the horizontal axis. On the graph of a supply curve, the quantity supplied at a particular price is the horizontal distance between the vertical axis and the supply curve.
Figure 5. An upward sloping supply curve.