econ.studio

Glossary term

Supply

How much sellers offer at each price. The upward-sloping half of every market: why a higher price draws out more output, what shifts the whole curve versus moving along it, and how supply meets demand to set the market price.

Glossary

Supply

Supply is how much sellers are willing to put up for sale at each possible price. The core pattern — the law of supply — is that a higher price draws out more output. Think about selling handmade posters at your campus market: if buyers pay 5each,youmightprintahandfulontheweekend.At5 each, you might print a handful on the weekend. At 20 each, you clear space in your room, buy more ink, and print boxes of them. Higher reward, more effort — that is the law of supply in one sentence.

More precisely, supply is the entire relationship between price and quantity supplied, holding everything else constant — economists call that assumption ceteris paribus (Latin: 'all else equal'). On a standard market diagram, supply appears as an upward-sloping curve with price on the vertical axis and quantity on the horizontal. It is important to separate two very different things: a movement along the curve happens when the good's own price changes, sliding you up or down the existing curve. A shift of the whole curve happens when something else changes — input costs, technology, the number of sellers, or taxes. If a new printing technology halves your ink cost, you supply more posters at every price, and the whole curve moves to the right.

Qs=c+dP,d>0Q_s = c + dP, \quad d > 0
Linear supply curve
A simple linear supply curve writes quantity supplied as rising in price: dd is the slope — how strongly sellers respond to a price change — and cc is the intercept, set by everything that can shift the curve (input prices, technology, seller count, taxes).
Law of supply
The principle that, all else equal, a higher price leads sellers to offer a greater QsQ_s. It is why the supply curve slopes upward.
Quantity supplied vs. supply
Quantity supplied (QsQ_s) is a single point on the supply curve — the amount offered at one specific price. Supply is the whole curve. A price change moves QsQ_s along the curve; a change in costs, technology, or seller count shifts the entire curve.
Producer surplus
The difference between the price a seller actually receives and the minimum they would have accepted. It is the area above the supply curve and below the market price — see producer surplus.
Market equilibrium
The price at which QsQ_s equals quantity demanded, so the market clears with no surplus or shortage. The supply curve is one of the two curves that determine it — see market equilibrium.