Supply is what producers are willing and able to sell at each price, over a set time.
The points to remember
- Willing to sell: the producer wants to sell at that price.
- Able to sell: the producer can actually produce it.
- At each price and over a period, as for demand.
Example: strawberries at €3 a box this week
Ana
Producing one box costs her €2, so at €3 she earns €1 a box.
Ben
Producing one box costs him €4, so at €3 he would lose €1 a box.
Cara
Her field flooded this year, so she has nothing to sell.
Remember it as: Willing and able, at this price, in this time: the same test as demand.
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When the price rises, producers offer more; when it falls, they offer less. That is the law of supply, ceteris paribus.
Our example (made-up numbers)
| Price of a box | Boxes offered per week |
|---|---|
| €2 | 10 |
| €3 | 20 |
| €4.50 | 30 |
| €6.50 | 40 |
Animated graph
Watch the graph build step by step in study mode.
The points to remember
- Price and quantity supplied move in the same direction.
- The supply curve slopes up from left to right.
- A price change moves sellers along the curve: it changes quantity supplied.
Why producers offer more at a higher price
More profit per box
At €5 instead of €3, each box earns more, so growers plant more.
Extra boxes cost more
To grow more, Ana pays pickers overtime: her extra boxes cost €4 each. At €5 they are worth producing.
New sellers join
A box costs Ben €4 to produce. At €3 he sells none; at €5 he earns €1 a box, so he starts selling.
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One seller, or all of them together?
Two kinds of supply
Individual supply
What one producer offers at each price: at €4, Dan offers 3 boxes.
Market supply
Every producer added together: at €4, 3 + 6 + 9 = 18 boxes.
Our example (made-up numbers)
| Price | Dan | Eva | Finn | Market supply |
|---|---|---|---|---|
| €3 | 2 | 4 | 6 | 12 |
| €4 | 3 | 6 | 9 | 18 |
Animated graph
Watch the graph build step by step in study mode.
The points to remember
- Market supply = every producer's quantity added at each price.
- Add across, never up. More producers push market supply right.
No paper has set this micro on its own yet. But every demand and supply diagram in Paper 2 needs a correctly drawn supply curve, and Paper 2 part (a) asks for definitions like this one.
Text C reports that the supply of strawberries rose sharply this summer.
Define the term supply.
Model answer plan
See the answer broken into clear points, with guidance on how each point earns marks.
Drawing a supply curve in the exam
- Label the axes P and Q, or Price and Quantity.
- Label the curve S.
- It slopes up from left to right.
- A title is not needed; a wrong label caps a 4-mark diagram question at 3.