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ECONOMICS NOTES

3. Supply

3.2. Concepts of supply

Key concepts related to supply include:

  1. Law of Supply: This principle states that, all else being equal, an increase in price leads to an increase in the quantity supplied. Conversely, a decrease in price results in a decrease in the quantity supplied.

  2. Supply Curve: This is a graphical representation of the relationship between the price of a good and the quantity supplied. It typically slopes upward, reflecting the law of supply.

  3. Factors Influencing Supply: Several factors can affect supply, including production costs, technology, number of suppliers, and government policies (like taxes or subsidies).

  4. Market Supply: This is the total supply of a good or service from all producers in the market, often represented by the sum of individual supply curves.