Supply

In economics, supply refers to the total amount of a specific good or service that
producers are willing and able to offer for sale at a given price.

by Yaroslav Vorontsov
Definition of Supply
Supply is the quantity of a product or service that producers are able and willing to offer for sale in the market
at a given price, ceteris paribus (all else being equal).
Determinants of Supply
Cost of Production

Changes in the cost of resources, labor, and technology can impact the supply curve.

Technology and Innovation

Advancements in technology can lead to increased productivity and efficiency, resulting in a

higher level of supply.

Government Regulation

Policies and regulations imposed by the government can affect the cost of production and
influence the supply of goods and services.
Shifts in Supply Curves
Changes in Input Prices
An increase in the cost of inputs,
such as raw materials or labor,
can cause a decrease in supply,
shifting the curve leftward.
Technological
Advancements
Technological progress can lead
to more efficient production
methods, increasing the supply
and shifting the curve to the
right.
Taxes and Subsidies
Taxes can reduce the profitability
of production, leading to a
decrease in supply, while
subsidies can encourage
increased production, shifting
the curve to the right.
Law of Supply
The law of supply states that as the price of a good or service increases, the quantity supplied by producers
also increases, ceteris paribus.
Elasticity of Supply
Elasticity of supply measures the responsiveness of quantity supplied to changes
in price. Goods with elastic supply have a greater change in quantity supplied
compared to a change in price, while goods with inelastic supply have a lower
change.
Supply and Demand Equilibrium
Market equilibrium occurs when the quantity of a good or service demanded by
consumers is equal to the quantity supplied by producers, resulting in a stable
market price.
Factors Affecting Supply Variability
Seasonal Factors Natural Disasters Changes in Technology

Changes in supply depending Events like hurricanes, floods, Advancements in technology

on the time of year, such as or earthquakes can disrupt can lead to changes in
agricultural products varying production, leading to a production methods and
due to planting and harvesting reduction in supply. capabilities, affecting the
seasons. overall supply in a market.