The idea of supply curve It is used in the field of economics. You have to remember that one curve It is a line that allows to develop the graphic representation of a magnitude according to the values that one of its variables acquires. The concept of offer On the other hand, it can refer to the goods that are put on sale in the market.
A supply curve , in this context, refers to the quantity of a certain product that a company is willing to sell yet price hypothetical, keeping the rest of the factors that could alter the amount offered constant. There is a direct link between this quantity offered and the price: at a higher price, greater profit for the company, which is therefore willing to sell as much of the product as possible.
The supply curve, in short, is considered an increasing type, because the higher the price, the greater the offer will also be. It can also be described as concave towards the axis of the ordered , and convex towards that of the abscissa; The quantities, in this case, are the prices.
In a graph, therefore, the supply curve specifies how many products the company For each price. To a price P1 , the seller is willing to offer a quantity Q1 ; to a price P2 , offer the quantity Q2 ; and so on.
Suppose a pants manufacturer wants to produce and offer 1000 pants At a price of 20 dollars . If the price goes up to 25 dollars , the amount offered grows to 1100 pants . At a price of 40 dollars , the offer is increased to 2500 pants . All these values , in a graph, allow to obtain the supply curve.
There is also the demand curve , which is defined as the graphic representation of the relationship between the maximum amount of a particular good or service that a consumer would like to buy, and its price. Both curves are key to the theoretical analysis of the economy when studying prices.
From the intersection of the supply curve and the demand curve , the price of the product in the market, according to the neoclassical economic theory. That intersection also marks the Balance between supply and demand.
Among the various concepts related to this topic is the elasticity , which can be defined as the percentage in which the quantity of goods offered varies at the moment in which the sale price goes through a variation of one percent. The elasticity belongs to the scope of the economy and its creator was Alfred Marshall , an economist of English origin.
Marshall relied on physics to find this variation (positive or negative, as the case may be) that occurs when one variable changes for another. It is important to note that the elasticity The supply curve is linked to several factors, such as the availability of the necessary resources and the technological level of the company.
A nuance that we must clarify is that when talking about supply curve It is understood that the offer to which reference is made belongs to a single company, to the quantities of a product or service and their respective prices; if, instead, the amounts offered by all the companies of a company are taken into account market or sector in particular, so the right concept is the market supply curve (It could also be of the industry, depending on the case). This concept, in other words, represents the quantities that are put up for sale in a given market, at each price.