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AGGREGATE MARKET EQUILIBRIUM: The state of equilibrium that exists in the aggregate market when real aggregate expenditures are equal to real production with no imbalances to induce changes in the price level or real production. In other words, the opposing forces of aggregate demand (the buyers) and aggregate supply (the sellers) exactly offset each other. The four macroeconomic sector (household, business, government, and foreign) buyers purchase all of the real production that they seek at the existing price level and business-sector producers sell all of the real production that they have at the existing price level. The aggregate market equilibrium actually comes in two forms: (1) long-run equilibrium, in which all three aggregated markets (product, financial, and resource) are in equilibrium and (2) short-run equilibrium, in which the product and financial markets are in equilibrium, but the resource markets are not.
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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, 2000-2026. [Accessed: March 8, 2026].
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BLACK DISMALAPOD
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Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius seeking to buy either clothing for your kitty cats or a set of luggage without wheels. Be on the lookout for infected paper cuts.
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Only 1% of the U.S. population paid income taxes when the income tax was established in 1914.
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"If you don't have time to do it right, when will you have time to do it over?" -- John Wooden, Basketball coach
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PV
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