Supply Curve

… a core concept in Economic Analysis

Clip for MRU video

Clip for MRU video1

Concept description

The supply curve shows how much of a good suppliers are willing to supply at different prices. (See Alex Tabarrok, reference below and video to right.)

In a supplementary MRU lesson (reference below and video below) Tabarrok elaborates with a slightly longer definition:

Click for MRU video2

Click for MRU video2

“A supply curve is a function that shows the quantity supplied at different prices. The quantity supplied is the quantity that producers are willing and able to sell at a particular price.”

He notes that one can read supply curves either horizontally or vertically, depending on the problem to be analyzed, as illustrated below:

ReadingSupplyCurves

MRU practice questions

See http://www.mruniversity.com/supply-curve-definition-example-practice-questions, and http://www.mruniversity.com/node/179640, accessed 20 April 2016.

  1. Along a supply curve, if the price of oil falls, what will happen to the quantity of oil supplied?
  2. Michael is an economist. He loves being an economist so much that he would do it for a living even if he only earned $30,000 per year. Instead, he earns $80,000 per year. (Note: This is the average salary of new economists with a Ph.D. degree.) How much producer surplus does Michael enjoy?

Source

Alex Tabarrok, The Supply Curve, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/supply-curve-definition-example, accessed 19 April 2016.

Alex Tabarrok, A Deeper Look at the Supply Curve, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/demand-curve-consumer-surplus-definition, accessed 19 April 2016.

Atlas topic and subject

Supply, Demand, and Equilibrium (core topic) in Economic Analysis.

Page created by: Ian Clark, last modified on 20 April 2016.

Image: Minute 0.21 of MRU Video, at http://www.mruniversity.com/courses/principles-economics-microeconomics/supply-curve-definition-example, accessed 20 April 2016.