Supply curves
Definition
A supply curve is a graph showing the relationship between the price of a good and the quantity that producers are willing to supply. It typically slopes upward from left to right, indicating that higher prices incentivize producers to supply more of a product.
Examples
- When gasoline prices rise, oil companies increase production to earn greater profits
- A farmer will plant more acres of wheat if wheat prices are expected to be high at harvest
- Tech manufacturers ramp up smartphone production when new models can be sold at premium prices
Key Fact
The Law of Supply states that as price increases, quantity supplied increases, all other factors being equal (ceteris paribus).
Study This Concept
Practice supply curves with free review games in these units: