Google
Wednesday 
October 22, 2014 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
Today's Index
Yesterday's Index
343.5

Help us compile the AmosWEB Free Lunch Index. Tell us about your last lunch.

Skipped lunch altogether.
Bought by another.
Ate lunch at home.
Brought lunch from home.
Fast food drive through.
Fast food dine in.
All-you-can eat buffet.
Casual dining with tip.
Fancy upscale with tip.

More About the Index
Favorite spice?

Pumpkin.
Clove.
Allspice.
Cinnamon.
Ginger.
Paprika.

INDEPENDENT VARIABLE: A variable that is identified outside the workings of the model. Also termed an exogenous variable, an independent variable is in essence the "input" of the model. It should be compared with an endogenous variable this is the "output" of the model.

Visit the GLOSS*arama


MARKET SUPPLY:

The combined supply of everyone willing and able to sell a good in a market. Market supply is one half of the market. The other is market demand. It is graphically represented by a positively-sloped market supply curve, which can be derived by combining, or adding, the individual supplies of every seller in the market.
Market supply captures the selling side of a market exchange. Guided by the law of supply, sellers are willing and able to sell a larger quantity at a higher price. This relation is illustrated by an upward-sloping market supply curve.

The Market Supply Curve

Market Supply
Market supply primarily focuses on the one-to-one relation between the supply price and the quantity supplied. The quantity supplied at higher prices is more than the quantity supplied at lower prices.

A representative market supply curve is illustrated in this exhibit. Note that the curve, or line, has a positive slope. At a relatively low price of $10, the quantity supplied is 100. At a relatively higher price of $40, the quantity supplied is 700.

A Few Determinants

While market supply focuses on the relation between supply price and quantity supplied, it is also affected by the five ceteris paribus supply determinants
: (1) resource prices, (2) production technology, (3) the prices of substitute or complement goods, (4) sellers' expectations, and (5) the number of sellers in the market. While a change in supply price causes a change in quantity supplied (a movement along a given market supply curve), a change in any of these five supply determinants causes a change in supply (a shift or repositioning of the market supply curve).

Deriving Market Supply

Market supply is the combined supply of every seller in the market. It is derived by adding the quantity supplied by each seller at different prices. Suppose, for example, that the Shady Valley market for crab puffs contains three sellers--MegaMart Discount Super Center, The Corner Store, and Harry's Hor D'oeuvres. The quantity that each is willing and able to sell at a range of prices is illustrated in this table.

Market Supply
the Numbers
MegaMart provides an ample supply of crab puffs. At the price of 10 cents each, it is willing and able to sell 50 crab puffs. However, as the price rises, the quantity it is willing and able to sell increases (reflecting the law of supply). The Corner Store is a second crab puff seller in town. At a 10 cent price, it is willing and able to sell 10 crab puffs. This quantity supplied also increases at higher prices. Harry's Hor D'oeuvres is less proficient at crab puff production and supply. At a 10 cent price, it does not supply crab puffs. It is able to supply 5 crab puffs at a 40 cent price and quantity supplied increases as the price rises.

The total market supply for crab puffs in Shady Valley is the combined supply of these three sellers. If, for example, the market price is 10 cents, the market supply is 60 crab puffs. This is the sum of 50 from MegaMart, 10 from The Corner Store, and 0 from Harry's Hor D'oeuvres. Each quantity in the far right column of the table is derived in a similar fashion. If the market price is 70 cents, then the market supply is 170 crab puffs, the sum of 80 from MegaMart, 70 from The Corner Store, and 20 from Harry's Hor D'oeuvres.

While this market supply is the combination of only three sellers, the procedure for deriving market supply is the same for markets with hundreds, thousands, or even millions of sellers. Market supply is derived by adding the quantities supplied of all sellers at every price.

Other Supplies

The term "market supply" is often used synonymously with the term "supply." When economists speak of "supply" they are usually referring to "market supply." When the term "market" is added as a modifier to "supply," it is done so to focus attention on the combined supply of ALL sellers in the market. In contrast, the unmodified term "supply" could refer to individual supply, market supply, or some other general notion of supply.

Adding "market" to "supply" also sets this phrase apart from other special types of "supply." A short list includes aggregate supply, which is the total production of goods and services in the macroeconomy; factor supply, which is the supply of the services of the factors of production; and money supply, which is the total amount of money circulating around the economy.

<= MARKET STRUCTURESMARSHALLIAN CROSS =>


Recommended Citation:

MARKET SUPPLY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2014. [Accessed: October 22, 2014].


Check Out These Related Terms...

     | market | market demand | competition | exchange | price | quantity |


Or For A Little Background...

     | ceteris paribus | opportunity cost | production | economic thinking | good | abstraction |


And For Further Study...

     | competitive market | voluntary exchange | Marshallian cross | market equilibrium | market adjustment | comparative statics | price elasticity of supply | elasticity | marginal cost | marginal product | short-run production analysis |


Search Again?

Back to the WEB*pedia


APLS

State of the ECONOMY

Consumer Price Index W
June 2014
234.702
Up minimally in 1 month Source: B L S

More Stats

RED AGGRESSERINE
[What's This?]

Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius wanting to buy either a key chain with a built-in flashlight and panic button or a green and yellow striped sweater vest. Be on the lookout for malfunctioning pocket calculators.
Your Complete Scope

This isn't me! What am I?

The 22.6% decline in stock prices on October 19, 1987 was larger than the infamous 12.8% decline on October 29, 1929.
"A stumble may prevent a fall. "

-- Margaret Thatcher, British prime minister

AACP
American Assocation of Commercial Publications
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2014 AmosWEB*LLC
Send comments or questions to: WebMaster