Supply
Introduced| English |
|---|
| supply/səˈplaɪ/ |
| law of supply/lɔː ɒv səˈplaɪ/ |
| quantity supplied/ˈkwɒntɪti səˈplaɪd/ |
| direct relationship/daɪˈrekt rɪˈleɪʃənʃɪp/ |
| marginal cost/ˈmɑːdʒɪnl kɒst/ |
| technology/tekˈnɒlədʒi/ |
| inputs/ˈɪnpʊts/ |
| subsidy/ˈsʌbsɪdi/ |
Why a higher price brings more sellers
- Offer more money for something, and more of it appears for sale.
- Farmers plant more, factories add a shift, sellers dig out old stock.
- Supply is the mirror image of demand — but it slopes the other way.
- It starts with the law of supply 供给定律.
The law of supply
- Supply 供给 is the whole relationship between price and how much sellers offer at each price.
- Quantity supplied 供给量 is the amount offered at one price.
- The law of supply: price up → quantity supplied up; price down → quantity supplied down. A direct relationship 正向关系.
- The curve slopes up because making extra units adds to marginal cost 边际成本 — a higher price is needed to cover it.
Supply and demand
The supply curve slopes up — a higher price draws out more. Cheaper inputs or better technology shift the whole curve right.
The law of supply says that, other things equal, when price rises the quantity supplied:
Price and quantity supplied move in the same direction — a direct relationship.
The supply curve slopes upward mainly because:
Each extra unit adds to marginal cost, so a higher price is needed to draw out more.
At a price of 6 dollars, Farm A offers 20 crates and Farm B offers 30 crates. What is the market quantity supplied at that price?
Market supply is horizontal summation: add quantities across sellers, $20 + 30 = 50$.
Movement vs shift
- A change in the good's own price → a movement along the supply curve.
- A change in anything else → a shift of the whole curve.
Same trap as demand: only the good's own price moves you along the curve. Costs, technology, or taxes shift it. Label your diagram carefully.
A fall in the price of raw materials causes a movement along the supply curve.
Input prices are not the good's own price — cheaper inputs shift the whole curve right.
What shifts supply — TITEN
- Technology 技术: better technology lowers cost → supply right.
- Input prices: cheaper inputs 投入 → supply right; dearer inputs → left.
- Taxes and subsidies 补贴: a tax on the seller shifts supply left; a subsidy shifts it right.
- Expectations of higher prices later → supply less now. Number of sellers rises → supply right.
A government payment of a fixed amount per unit to sellers is a ______, which shifts supply right.
A subsidy lowers sellers' costs, shifting the supply curve to the right.
Select all that shift the supply curve to the right (increase supply).
Technology, cheaper inputs and more sellers raise supply; a tax shifts it left.
Supply slopes up (the law of supply) because rising marginal cost needs a higher price. The good's own price = a movement along; any other factor (TITEN) = a shift of the whole curve.