Lesson preview · Supply
The Supply Curve
~11 min · Free to read
If you can plot a demand curve, you already know 90% of how to plot a supply curve. Same axes, same method — but the line slopes the other way. The supply schedule lists how much producers want to sell at each price; the supply curve is its visual counterpart. Just like demand, but upside down.
Key Term
Supply Schedule
A table listing the quantity sellers would produce at each price. Each row is one (price, quantity) pair.
Key Term
Supply Curve
A graph showing the relationship between price and quantity supplied. Price on the vertical axis, quantity on the horizontal — same convention as demand. The curve slopes upward, reflecting the law of supply.
Tip
Same axes, opposite slopes
Both demand and supply use P (vertical) and Q (horizontal). The difference is direction: • Demand slopes down. • Supply slopes up. Drawn together, they form the iconic ‘X’ that produces market equilibrium.
Reading off a curve. Given a price, find quantity by tracing across to the curve and dropping to the x-axis. When supply is given as an equation like , just plug in. At , units.
From individual to market. Each firm has its own supply curve based on its costs, capacity, and technology. The market supply curve is the horizontal sum of all firms’ supplies: at each price, add up how many units every firm would produce. Same operation as market demand — pick a price, sum the quantities.
Key Term
Market Supply
The total quantity supplied by all firms at each price. Found by summing every individual firm’s quantity at that price (horizontal summation along the x-axis).
Tip
The mirror principle
Market demand = horizontal sum of individual demands. Market supply = horizontal sum of individual supplies. Same operation, opposite sides of the market. At any price, sum quantities — never prices.
Check yourself · no marks
At 10 dollars per pizza, Tony’s Pizzeria would make 50, Luigi’s would make 70, and Bella’s would make 40. If these are the only three pizza shops in town, what is market quantity supplied at 10 dollars?
Commit to one first. Guessing and being wrong beats reading the answer cold.
Worked Example
Three lemonade stands in a small town. Their individual supply schedules:
| Price | Ava | Ben | Cara |
|---|---|---|---|
| 1 dollar | 0 | 5 | 2 |
| 2 dollars | 10 | 15 | 8 |
| 3 dollars | 25 | 30 | 20 |
| 4 dollars | 40 | 50 | 35 |
Construct the market supply schedule.
Practice · 1 / 3
A supply schedule shows: at 2 dollars, 20 units; at 4 dollars, 50 units; at 6 dollars, 90 units. The supply curve slopes:
What makes the whole supply curve move? You learned the distinction on demand: a change in the good’s own price is a movement along the curve; anything else is a shift of the curve. The exact same logic applies to supply — same mental test, same right-equals-more language. The only thing that’s new is which non-price factors do the shifting.
Tip
Quick reminder
Own-price change → MOVEMENT along the curve (a change in quantity supplied). Anything else → SHIFT of the curve (a change in supply itself). Right = more at every price · Left = less at every price.
The 5 supply shifters — INTER-G. That’s the one new thing to memorize. Demand had TRIBE; supply has INTER-G: Input costs, Number of sellers, Technology, Expectations, Regulation (Government).
Key Term
The 5 Supply Shifters (INTER-G)
• Input costs — wages, raw materials, energy, rent • Number of sellers — more firms = more supply • Technology — anything that boosts productivity • Expectations — what producers think future prices will do • Regulation (Government) — taxes, subsidies, restrictions
Input costs are the most intuitive: cheaper flour, labor, or rent → bakeries can profitably make more bread at every price → supply shifts right. Technology is the long-run engine: a better algorithm, faster machine, or new fertilizer pushes supply right and rarely reverses. Number of sellers is arithmetic — more firms, more supply. Expectations flips current behavior in a counterintuitive way: if producers expect higher future prices, they hold back current sales, so current supply shifts LEFT. Government policy shifts supply via subsidies (right), taxes (left), or regulation (usually left).
Key Term
Direction Cheat Sheet
Shifts RIGHT (↑ supply): input costs fall · technology improves · more sellers enter · subsidies · expected future prices fall
Shifts LEFT (↓ supply): input costs rise · sellers exit · taxes · stricter regulation · expected future prices rise (hoarding)
Check yourself · no marks
Why do RISING expected future prices shift CURRENT supply LEFT?
Commit to one first. Guessing and being wrong beats reading the answer cold.
Worked Example
For each event, decide whether it’s a movement along or a shift of the supply curve. If a shift, name the INTER-G shifter and the direction.
- Sony announces the PS5 retail price will rise from 500 dollars to 600 dollars.
- A new chip factory cuts the cost of producing each PS5.
- The minimum wage rises → fast-food burgers.
- A new vaccine makes chicken farming 40% cheaper.
- Producers expect lithium prices to triple next year → current lithium supply.
Practice · 1 / 5
The price of wheat falls. Wheat farmers plant less wheat. This is best described as:
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