#economics

🔹 Definition of Supply

• The amount of a good or service that producers are willing and able to sell at various prices over a period of time.

🔹 Law of Supply

• As price increases, quantity supplied increases.

• As price decreases, quantity supplied decreases.

• Assumes all other factors are constant (ceteris paribus).

• Results in an upward-sloping supply curve.

🔹 Determinants of Supply (Factors that shift the supply curve)

• Input costs: Lower input costs → more supply; higher costs → less supply.

• Technology: Advances improve efficiency → increase supply.

• Number of sellers: More sellers in the market → increase in supply.

• Producer expectations: If future prices are expected to rise, current supply may decrease.

• Government policies:

  • Taxes on production → decrease supply.

  • Subsidies → increase supply.

• Natural conditions: Good weather or favorable conditions → increase supply (especially in agriculture); disasters → decrease supply.

🔹 Supply vs. Quantity Supplied

• Supply: Refers to the entire relationship between prices and quantity supplied (the whole curve).

• Quantity Supplied: Refers to a specific amount offered at a specific price (a single point on the curve).

📌 Key Words

• Supply

• Quantity Supplied

• Law of Supply

• Price

• Supply Curve

• Upward-sloping

• Input Costs

• Technology

• Producers

• Market Supply

• Expectations

• Taxes

• Subsidies

• Government Policies

• Natural Conditions

• Shift in Supply

• Ceteris Paribus