Amount of a good or service a producer is willing and able to sell in a given period of time, at a given price, ceteris paribus
Objective of producers is to maximise profits
Profit=Revenue−Costs
Law of Supply: In a given time period, the quantity supplied of a good or service is directly related to its price, ceteris paribus
Produces aim to maximise profit, while consumers aim to maximise satisfaction
Individual Supply: Refers to the sum of the individual supply for a good or service by all the producers in the market
Market Supply: Refers to the sum of all the individual supply for a good or service by all the producers in the market
Exceptional Supply Curves
Vertical supply curve
No matter the price, the same quantity is supplied
E.g., rare antiques
Non-Price Supply Factors
Change in Price of Factor Inputs
Factor prices: refers to the cost of factors of production
Affects cost
Factor prices increase
Cost of production increases
More expensive to produce goods and services
Producers cut down on supply
And vice versa
Changes in Expectations about Future Price Changes
If the seller expects the price of a good to rise in the future, the seller will store the goods now in order to sell more in the future
On the other hand, if the price of the good is expected to drop in the near future, sellers will earn more by placing goods on the market immediately before the price falls
Expectations of higher prices will reduce supply
Expectations of lower prices will increase supply
Changes in State of Technology
Technological changes take place over time as a result of innovation and expertise
With improved production methods, factors of production would be more productive
The production of goods would increase, thus supply increases
Effects Affecting Availability of Resources and the Supply Chain
Changes in weather conditions
Natural disasters
Climate change
War
Changes in Number of Suppliers
Increased suppliers of a good or service increase supply, and vice versa
Shifts supply curve over to the right, or left for decreased number of suppliers
Suppliers may enter or leave an industry due to business outlook
