Supply

A supply specifies the units of a good or service that a producer is willing to supply (Qs) at alternative prices over a given period of time.i.e Qs = f (P). The supply curve normally has a positive (upward) slope, indicating that the producer must receive a higher price for increased output due to the principle of increasing costs. A market supply curve is derived by summing the units each individual producer is willing to supply at alternative prices. A typical market supply curve :-

The supply curve above shows the changes on the quantity supplied. An increase in the quantity supplied by firms shifts the supply curve rightward,whereby a decrease will see a backward shift.

The market supply curve shifts when the number and/or size of producers changes,factor prices such as interest,wages, rent paid to economic resources change,the cost of materials,technological progress occurs, and/or the government subsidization(To be explained soon). A change in supply thereby denotes a shift of supply curve. A change in quantity supplied indicates a change in the commodity's price and therefore a movement along an existing supply curve.