ECONOMICS NOTES

3.3. supply curve

The law of supply is based on the following assumptions:

    Producers are profit-maximizing: Producers want to maximize their profits, and they will produce more of a good if the price is high enough to cover their costs and earn a profit.   

The cost of production is constant: The cost of producing a good does not change as the quantity produced increases.
There are no changes in technology: New technologies can change the cost of production, but the law of supply assumes that technology remains constant.
There are no changes in the number of producers: The number of producers in the market does not change.