Supply
Definition
Supply refers to the quantity of a good or service that producers are willing and able to offer for sale at different price levels. It is determined by factors such as production costs, technology, resource availability, and government regulations.
Analogy
Think of supply like a lemonade stand run by kids on a hot summer day. The amount of lemonade they can make depends on how many lemons they have (resources), how much sugar they need (production costs), and whether their parents allow them to sell it (government regulations).
Related terms
Equilibrium Price: The equilibrium price is the market-clearing price where the quantity supplied equals the quantity demanded.
Surplus: A surplus occurs when the quantity supplied exceeds the quantity demanded at a given price level.
Shortage: A shortage occurs when the quantity demanded exceeds the quantity supplied at a given price level.
"Supply" appears in:
Subjects (1)
Additional resources (1)
Practice Questions (9)
- What is supply?
- What is the effect of an increase in resources on supply?
- What happens to supply when taxes decrease?
- Which determinant of supply is represented by the letter "E" in the acronym R-O-T-T-E-N?
- What is the effect of an increase in technology on supply?
- What happens to the equilibrium price if there is a increase in supply?
- How would the price of cotton decreasing affect the supply of cotton T-shirts?
- How would a price increase of a fertilizer used to produce coconuts affect the supply of coconuts?
- When supply and demand for a currency both decrease, what happens to the exchange rate?
Resources
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