3.4:
Market Supply
Market supply refers to the total quantity of goods or services that all producers are willing and able to offer during a particular period. It shows the combined quantities supplied by individual sellers across various price levels.
For example, the total number of smartphones available from all manufacturers in a given market constitutes the market supply of smartphones.
Suppose there are only two producers of smartphones in a market. If the supply schedule of smartphones from producer X and producer Y at different prices is known, the combined supply from both producers is the total market supply.
Graphically, the market supply curve is constructed by horizontally summing the individual supply curves of all producers, in this case, producers X and Y.
Like the individual supply curve, the market supply curve slopes upward from left to right. This positive slope reflects the principle that as the price of a product increases, producers are incentivized to increase their output, leading to a higher overall market supply, and vice versa.
The market supply curve provides valuable insights into the functioning of markets and easily informed decision-making.
3.4 Market Supply
Market supply refers to the total quantity of a good or service that all producers are willing and able to offer for sale at various prices within a specific market. It is derived by summing the individual quantities supplied by all producers in the market at each price level. A market supply curve is created using a schedule that lists different price-quantity combinations supplied by all producers.
An example is the aggregate supply of smartphones provided by various manufacturers. For instance, in a market with only two smartphone producers, the sum of their supply schedules constitutes the total market supply.
The market supply curve emerges from the combination of individual supply curves, such as those of producers A and B. Similar to the individual supply curve, the market supply curve slopes upward from left to right. The upward slope occurs because higher product prices incentivize producers to augment production, increasing overall market supply, and visa-versa.
The market supply curve furnishes valuable insights into market dynamics, enabling informed decision-making processes.