Supply
Supply is defined as the quantity of a product that producers are able and willing to make available for sale at a certain price during a specific period of time under assumption that other things remain constant.
Supply is not only made by manufacturers of goods but also by owners of resources (such as land, labor etc.). From the perspective of resource suppliers, supply can be defined as the quantity of resources that resource owners are able and willing to supply during a period at a specific price, provided that other things remain constant.
To constitute supply, both the willingness and the ability to make supply must be present. Thus if a producer is willing to make 3,000 units of a product available for sale each day but his production capacity is only 1,000 units per day, his supply will be 1,000 units instead of 3,000 units.
Economists usually present supply information as a series of supply levels at various prices in table called supply schedule. Supply schedule when plotted produces a curve shaped graph called supply curve.
Example
The following table shows the quantity of t-shirts supplied by a hypothetical producer B at various prices during a year.
| Price Per Shirt | Number of Shirts Supplied |
|---|---|
| $10 | 50 |
| $20 | 75 |
| $30 | 110 |
| $40 | 160 |
| $50 | 250 |
The above data shows that A supply of t-shirts is 50 units at a price of $10 per unit, 75 units at a price of $20 per unit and so on. We can also notice that the annual supply increases as the unit price increases. This is according to well know microeconomic law called law of supply.
by Irfanullah Jan, ACCA and last modified on