Is the supply curve positive or negative?

The supply curve demonstrates the supplier's positive price-quantity connection. When the price of a product goes up, the supply of that product goes down. When the price of a product drops, the supply of that product goes up.

In other words, lower prices lead to higher quantities sold and vice versa. This is why the supply curve is also called an inverse relationship between price and quantity supplied.

Note that the supply curve can be either upward sloping or downward sloping. If the supply of a product falls when its price rises, then we say that the supply curve is upward sloping. If the supply of a product increases when its price rises, then we say that the supply curve is downward sloping.

Thus, in general, the supply curve of a product is the relationship between its price and quantity supplied.

Now back to our example, the supply curve of laptop computers is shown in figure 1. It can be seen that the supply of laptop computers rises when their price rises. This means that more people will want to buy them if their price goes up.

Also, note that the supply of laptop computers falls when their price drops.

How does a supply curve illustrate the law of supply?

A supply curve is a graphical representation of the connection between price (shown vertically) and quantity (shown horizontally). The supply curve's increasing slope exemplifies the law of supply, which states that a greater price leads to a larger amount provided, and vice versa.

The law of supply means that as the price of a product increases, more of it will be bought; and as the price goes up, less of it will be bought at any given time. It follows that if the price of a product were to drop, then consumers would stop buying so much of it. In other words, the quantity demanded would fall until the price reached some point where the quantity demanded equals the quantity supplied.

Some examples used to explain this concept are products that lose their flavor over time or go out of style. These things happen because people become tired of them or find something else that takes their attention. When this happens, they buy less of the original product and more of the new one. This is exactly what happens with the supply curve. As the price of the original product drops, more of it is bought, until no more are sold. At that point, the supply reaches its lowest level and stays there until another trend changes the demand for these items again.

Another example is when a new product comes on the market.

Why do economists use a supply curve?

A supply curve depicts the relationship between product pricing and the quantity of product that a seller is willing and able to supply. The vertical axis of the graph represents the product price, while the horizontal axis represents the quantity of goods delivered. Thus, a supply curve can be used to show the relationship between price and quantity supplied.

Economists use the term "supply curve" to describe a relationship between the price of a good or service and the amount people are expected to want or need at each price. The concept comes from the fact that most products have limited supplies. If the price of a car rises very high, few will buy it. At some point, the number of cars on the market will equal the number of buyers; no new cars will be sold because there are no longer any available. Similarly, if the price of bread goes up very high, people will eat less of it. Eventually, all the wheat in the world will not be enough to make as much bread as people need/want/buy.

In economics, the demand for a product or service depends on its price and on its characteristics other than price, such as quality or brand name. In general, consumers prefer more expensive products that offer better value for money. However, when prices are low, even poor-quality products will attract customers due to their reduced cost.

What is the purpose of the supply curve?

A supply curve is a graphical representation of the direct relationship between a product's or service's price and the quantity that producers are willing and able to supply at a given price within a given time period, given other factors such as the number of suppliers, resource prices, technology, and so on. In economics, supply curves are used to describe the relationship between the price of a good or service and the quantity demanded at each price. Supply curves can also be described as the marginal cost of producing an additional unit of the good.

The demand for a good or service increases when its price drops below some threshold value, called the indifference point. Once the indifference point is crossed, the demand begins to fall again. The reason why demand decreases even though the price remains the same or even decreases further is because lower prices mean more units sold, which results in higher revenues and profits. However, this also leads to increased competition, which causes reduced costs and thus increased profit margins.

Supply curves can be differentiated based on their degree of verticality or horizontality. A strictly vertically-integrating supplier faces increasing production costs with every additional unit produced. Thus, they can only produce a certain amount before becoming economically infeasible. A supplier with relatively low variable production costs can produce a greater amount of the good before running into problems. They are said to have a more flexible supply structure.

Catherine Wilson

Catherine Wilson is a respected teacher and scientist. She holds a PhD in chemistry, but her true passion lies with teaching children about the wonders of science. Catherine has an endless love for learning and is able to share this love with others through her lessons. One thing that Catherine loves about being a chemist is how it allows her to see the world differently by looking at everyday objects in new ways.