Producers are people, companies or

countries that make, grow or supply goods,

services or resources in a market. Producers
come in many forms:

● Firms who sell final goods and

services or intermediate goods in
the product market
● Firms who sell raw materials in
the resource market
● Households who offer their
services in the labour market
● Governments and other countries
that produce and offer goods,
services and materials, and supply
workers
● Supply is the amount of a
good/service that a producer
is willing and able to supply at
a given price in a given time
period.

● For example, if a street vendor in

Delhi sold 1000 portions of
pakora in a day at a price of 10
rupees (INR) per portion, then we
would say that the quantity
supplied of pakora priced at INR
10 is 1000 portions per day.
The law of supply states that there is a
positive (direct) relationship between
quantity supplied and price, ceteris paribus
● When the price rises the QS rises
● When the price falls the QS falls

The supply curve is sloping upward as there

is a positive relationship between the price
and quantity supplied (QS)
● Rational profit maximising producers
would want to supply more as prices
increase in order to maximise their
profits