Supply
✏️ In one line
Supply is how much of a good sellers are willing and able to sell at different prices, over a period of time.
📖 Story time
- Meera sells mangoes in summer.
- When mangoes sell for ₹40 a kg, she brings only 8 kg to her shop.
- When the price rises to ₹80 a kg, selling becomes worth more, so she brings 16 kg.
- This is the law of supply: a higher price makes sellers offer more.
🎯 Your turn
Meera wants to sell 16 kg of mangoes. Slide the price to where she would offer that much.
Nice! At ₹80 a kg Meera offers 16 kg. The supply curve slopes upward: a higher price, more supply.
Not quite. Hint: Sellers offer more when the price is higher.
By the law of supply, sellers offer less when the price rises.
Nice! Correct, it's false. A higher price makes selling more rewarding, so sellers offer more.
Not quite. Hint: Meera brought more mangoes at ₹80 than at ₹40.
Which way does a supply curve usually slope?
Nice! Yes. Price and quantity supplied move together, so the curve rises.
Not quite. Hint: It's the opposite of the demand curve.
Kabir: Kabir buys a new machine that makes each steel bottle cheaper to produce.
What happens to the supply of his bottles?
Nice! Right! Lower cost of production lets Kabir offer more bottles at every price.
Not quite. Hint: Cheaper to make means he can make…?