Concept: Supply

The supply curve is an important relationship economics. It represents the behavior of sellers in markets. Each supply curve shows the quantity of a well-defined good or service that will be offered for sale—at various prices—during a particular time period.

For example, the graph shown here depicts the daily supply of hamburgers in a medium-sized city. The price per burger is measured on the vertical axis, and the total number of burgers supplied is measured on the horizontal axis. This is a market supply curve, so it reflects the behavior of all sellers in this market.

Notice that the supply curve slopes upward from left to right. More hamburgers are made available at higher prices than at lower prices. This positive relationship between price and quantity supplied illustrates the law of supply: Other things equal, the quantity supplied of a good rises when the price of the good rises.

To see how this works, use the slider bar to change the price. As you do this, you will be simulating a movement along the supply curve. This movement is called a "change in quantity supplied" as a result of the change in price. You should see that a higher price means a larger quantity supplied, while a lower price means a smaller quantity supplied.