Individual And Market Supply
Economics notes
Individual And Market Supply
Equilibrium price and quantity
➡️ Supply is the amount of a good or service that producers are willing and able to offer for sale at a given price. It is determined by the combination of individual and market supply.
➡️ Individual supply is the amount of a good or service that a single producer is willing and able to offer for sale at a given price. It is determined by the producer's cost of production, the price of related goods, and the producer's expectations about future prices.
➡️ Market supply is the total amount of a good or service that all producers in a market are willing and able to offer for sale at a given price. It is determined by the sum of individual supplies. The equilibrium price and quantity of a good or service is determined by the intersection of the market supply and demand curves.
What is the difference between individual and market supply in economics?
Individual supply refers to the quantity of a good or service that an individual producer is willing and able to offer for sale at a given price. Market supply, on the other hand, refers to the total quantity of a good or service that all producers in a market are willing and able to offer for sale at a given price.
How does the law of supply apply to individual and market supply?
The law of supply states that as the price of a good or service increases, the quantity supplied by producers also increases, ceteris paribus. This applies to both individual and market supply, as individual producers will increase their supply in response to higher prices, and the total market supply will also increase as more producers enter the market or existing producers increase their output.
What factors can cause a shift in individual or market supply?
There are several factors that can cause a shift in individual or market supply, including changes in production costs, technological advancements, changes in the price of related goods or services, changes in government policies or regulations, and changes in the number of producers in the market. These factors can cause the supply curve to shift to the left or right, indicating a decrease or increase in supply at all price levels.