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GROSS DOMESTIC PRODUCT, WELFARE: Gross domestic product (GDP) is the total market value of all goods and services produced within the political boundaries of an economy during a given period of time, usually one year. GDP is intended to measure the nation's production of wants-and-needs satisfying goods and services. While it provides an indication of how far the economy has come on the long road to battling the ever-present scarcity problem, it is NOT a direct measure of the nation's welfare or well-being. GDP is certainly a big component of the well-being of the country, but not the ONLY component.
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                           QUANTITY SUPPLIED: The specific quantity of a good that sellers are willing and able to sell at a specific supply price. The key word is "specific." Quantity supplied and supply price form matched pairs--one quantity, one price. The combination of all price-quantity pairs is then what constitutes supply. The supply curve is a plot of the quantity supplied at each supply price. Quantity supplied is the maximum quantity that sellers will offer for sale at a given price. The primary influence on quantity supplied is the supply price. The quantity supplied is generally greater if the supply price is higher and less if the supply price is lower.Constrained by CostSellers bump into a maximum quantity supplied for a given supply price due to the opportunity cost of production. Because the cost of production generally rises with the quantity produced, sellers need a higher price as the quantity supplied increases. Sellers offer a quantity for sale if the price received is sufficient to cover the cost of production. Should they try to produce too much, beyond the maximum quantity supplied, cost rises and exceeds revenue.Consider the hot fudge sundae selling activities of the Hot Momma Fudge Bananarama Ice Cream Shoppe. Hot Momma Fudge is willing and able to produce 50 Hot Momma Fudge Bananarama Ice Cream Sundaes at a $3 supply price. This price allows Hot Momma Fudge to cover the cost of ice cream, hot fudge, bananas, workers, plastic dishes, electricity, and the other production inputs. However, should Hot Momma Fudge try to produce 51, the opportunity cost exceeds this $3 price. On the Supply CurveAs the maximum quantity that sellers are willing and able to sell, the quantity supplied lies ON the supply curve. In essence, the supply curve plots the range of quantities supplied for a range of supply prices.Consider the supply curve for electronic calculators displayed in the exhibit to the right. For a supply price of $15, the quantity supplied is 200 calculators. Would calculator sellers be willing to sell fewer than 200 calculators at this price? Certainly. In so doing, their production cost is lower and profit is higher. Would calculator sellers be willing to sell more than 200 calculators at this price? Certainly not. The story is the same for any quantity. Only the numbers differ. For a supply price of $45, the quantity supplied is 800 calculators. Sellers are willing to sell fewer than 800 calculators at this price, but not more. Quantity Supplied, Not SupplyWhile the two terms are occasionally confused, quantity supplied is not the same as supply. - Quantity supplied is the specific quantity that sellers supply at a specific supply price. Quantity supplied is matched up with a specific price. Should the price change, then so too does the quantity supplied. Quantity supplied is a single number.
- Supply, however, is the range of prices and quantities. It is all price-quantity pairs that make up the supply curve. Supply is a whole range of numbers.
Recommended Citation:QUANTITY SUPPLIED, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: April 30, 2024].
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WHITE GULLIBON
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Today, you are likely to spend a great deal of time at the confiscated property police auction trying to buy either a how-to book on fine dining or a coffee cup commemorating the first day of winter. Be on the lookout for empty parking spaces that appear to be near the entrance to a store.
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This isn't me! What am I?
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Woodrow Wilson's portrait adorned the $100,000 bill that was removed from circulation in 1929. Woodrow Wilson was removed from circulation in 1924.
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"If you wouldn't write it and sign it, don't say it." -- Earl Wilson, Columnist
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GLS
Generalized Least Squares
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