What is Supply? Definition, Meaning & Example
The quantity of a good or service that producers are willing and able to offer at a given price.
TL;DR: The quantity of a good or service that producers are willing and able to offer at a given price.
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Supply: The quantity of a good or service that producers are willing and able to offer at a given price.
Explanation
Supply is positively related to price: as price increases, quantity supplied usually increases. Factors affecting supply include production costs, technology, availability of inputs, and producer expectations. Supply curves show the relationship between price and quantity supplied. Aggregate supply is the total supply in an economy. Market equilibrium occurs where supply equals demand.
Example
When rice prices increase, farmers are willing to grow more rice and supply more to the market.
Frequently Asked Questions
What factors affect supply?
Production costs, technology, input availability, government policies, and expectations affect supply.
What is the relationship between price and supply?
Generally, supply and price are positively related: higher price encourages greater supply.
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