Macroeconomics
Quantitysupplied isthespecifcamountofaproductthatsellersarereadytoprovidetothemarketata given price. Graphical Representation and the Law of Supply Thesupplycurveisplottedusinga supplyschedule thatshowshowmuchproducersarewillingandable tosellofaparticulargoodorserviceatdifferentprices.Thepriceisalsoplottedonthey-axis,whereas the quantity supplied is plotted on the x-axis. The Law of Supply states that as the price of a good or serviceincreases ,producersbecomemore inclinedto supplyagreaterquantity tothemarket.Conversely,whenthepricedecreases,thequantity supplied tends to decrease because revenues are expected to drop at lower prices. This means that there is a positive/direct relationship between price and quantity supplied illustrated by an upward-sloping supply curve (from left to right). Understanding supply is essential for businesses, policymakers, and economists asitaffectspricingstrategies,productiondecisions,andoverallmarket equilibrium. Based on this supply curve example below, producers sell 100 units at $80, 200 units at$100,300 unitsat$120andsoon.Thisreflectsthelawofsupplythatstatesthatquantitysuppliedincreaseswith an increase in price and decreases with a decrease in price.
Movements Along vs. Shifts of the Supply Curve Similartodemand,a changeinprice causes amovementalongthesupplycurve thataffects quantity supplied , whereas a changeinnon-pricefactorsreferredtoas supplydeterminants ,causes shiftsof the supply curve from its original position signaling a change in supply.
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