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Quantity Supplied of a Good: Definition & Overview

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  • 0:04 What Does 'Quantity…
  • 0:35 Law of Supply
  • 1:02 Analytical Tools
  • 1:31 Individual Supply and…
  • 2:04 Shifts in the Supply Curve
  • 3:02 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Many economic issues revolve around supply, demand and price. In this lesson, you'll learn about supply and related concepts. You'll also have a chance to reinforce your knowledge with a short quiz after the lesson.

What Does 'Quantity Supplied' Mean?

Quantity supplied is the amount of a good that sellers are willing to sell and are able to sell. Willingness is generally a function of price. If the price a seller can obtain for a good supplied exceeds its costs to produce, a seller will usually provide it. A seller must also be able to supply the goods to the market. Ability to supply is usually a function of resources available to produce the good. Sometimes the level of resources will restrict supply. For example, diamonds are limited in supply, which may make certain high caret rings scarce.

Law of Supply

There is a strong positive correlation between the price sellers can obtain for selling a good and the quantity of the good sellers are willing to offer to the marketplace for sale. A positive correlation means that as the market price of a good increases, the quantity supplied to the market for sale increases. This makes sense, of course, because sellers will try to make more money by selling more goods if they can get higher prices. This relationship between price and quantity supplied is known as the law of supply.

Analytical Tools

Economists use a couple different techniques to analyze supply. Data is often collected in a supply schedule, which is simply a table that shows the relationship between the quantity supplied at a particular price point. After collecting the data and placing it in a supply schedule, you can then plot the change in quantity supplied based upon price on a graph. If you connect the data points plotted, you come up with a supply curve. A supply curve is upward sloping, which means that as price increases, supply increases.

Individual Supply and Market Supply

You can look at supply from an individual seller basis and from a market basis. Individual supply is simply the supply of goods one particular seller presents to the market for sale at a particular price. On the other hand, market supply is the aggregate supply offered by all sellers in the market at a particular price. For example, assume John and Jane are the only suppliers of widgets in a market. John will supply 5 widgets to the market if the price for each widget is $10, but Jane will supply 7 widgets at that price. The market supply at $10 is 12.

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