{"id":2800,"date":"2023-02-19T16:10:50","date_gmt":"2023-02-19T16:10:50","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/learn-it-2-3-2-microeconomics\/"},"modified":"2025-05-21T17:07:14","modified_gmt":"2025-05-21T17:07:14","slug":"learn-it-2-3-2-microeconomics","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/learn-it-2-3-2-microeconomics\/","title":{"raw":"Learn It 2.3.2: Microeconomics","rendered":"Learn It 2.3.2: Microeconomics"},"content":{"raw":"
\r\n

The Nature of Supply<\/h2>\r\n
\r\n
\r\n

law of supply<\/h3>\r\n

Supply <\/span><\/strong>is<\/span> the quantity of a good or service that businesses will make available at various prices. According to the law of supply, there is a direct relationship between price and the quantity that businesses will make available. The higher the price, the greater the quantity supplied. Lower prices will correspond to lower quantities supplied. A graph of this relationship is called a supply curve<\/span><\/strong>.<\/p>\r\n<\/section>\r\n

We can again plot the quantity of coats on the\u00a0x<\/em>-axis and the price on the\u00a0y<\/em>-axis. As\u00a0shown below, 800 coats will be available at a price of $100. Note that the supply curve slopes upward and to the right, the opposite of the demand curve. If people are willing to pay higher prices, suppliers of coats will buy more inputs (for example,\u00a0fabric, dye, thread, machinery, labor) and produce more coats. The quantity supplied will be higher at higher prices, because manufacturers can earn higher profits.<\/p>\r\n

\r\n
\r\n[caption id=\"\" align=\"alignnone\" width=\"1493\"]\"The Figure 1. The supply curve shows the direct relationship between price and quantity supplied.[\/caption]\r\n<\/figure>\r\n
[ohm2_question height=\"400\"]3446[\/ohm2_question]<\/section>\r\n<\/div>\r\n<\/section>\r\n<\/section>","rendered":"
\n

The Nature of Supply<\/h2>\n
\n
\n

law of supply<\/h3>\n

Supply <\/span><\/strong>is<\/span> the quantity of a good or service that businesses will make available at various prices. According to the law of supply, there is a direct relationship between price and the quantity that businesses will make available. The higher the price, the greater the quantity supplied. Lower prices will correspond to lower quantities supplied. A graph of this relationship is called a supply curve<\/span><\/strong>.<\/p>\n<\/section>\n

We can again plot the quantity of coats on the\u00a0x<\/em>-axis and the price on the\u00a0y<\/em>-axis. As\u00a0shown below, 800 coats will be available at a price of $100. Note that the supply curve slopes upward and to the right, the opposite of the demand curve. If people are willing to pay higher prices, suppliers of coats will buy more inputs (for example,\u00a0fabric, dye, thread, machinery, labor) and produce more coats. The quantity supplied will be higher at higher prices, because manufacturers can earn higher profits.<\/p>\n

\n
\n
\"The
Figure 1. The supply curve shows the direct relationship between price and quantity supplied.<\/figcaption><\/figure>\n<\/figure>\n