Handout 1 C: The supply curve

Supply can be defined as the quantities of a good or service offered for sale on a market at different prices (van den Bogaerde, 1983).

Larger quantities are normally offered for sale at higher prices. (If you were a baker would you bake more bread if the price was R15 than if the price was 69c - the answer is: yes. At a price of 69c you may not be able to cover your costs, while at R 15 you would most probably make a nice profit).

Here is an example of a supply schedule and the accompanying graphic representation of the supply curve:

source: http://www.harpercollege.edu/mhealy/eco212i/lectures/s&d/s&d.htm

You will notice that the quantity supplied rises as the price increases. It therfore rises from left to right. Again changes in price will cause movement along the curve; but changes in the supply quantity will cause a shift in the curve itself.