Law of Supply
Definition
The law of supply states that as the price of a good or service increases, the quantity supplied by producers also increases, and vice versa.
Related terms
Market Supply: The total quantity supplied by all producers in a market at different prices.
Elasticity of Supply: Measures how responsive the quantity supplied is to changes in price.
Producer Surplus: The difference between what producers are willing to sell a good for and what they actually receive.
"Law of Supply" appears in:
Subjects (1)
AP Macroeconomics
Study guides (2)
AP Microeconomics - 2.7 Market Disequilibrium and Changes in Equilibrium
AP Microeconomics - 5.2 Changes in Factor Demand and Factor Supply
Additional resources (1)
AP Microeconomics - Unit 2 Overview: Supply and Demand
Practice Questions (2)
According to the Law of Supply, what happens to the quantity supplied as the price of a good increases?
What is the relationship between the price of a good and the quantity supplied according to the Law of Supply?
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About Us
About Fiveable
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Privacy Policy
CCPA Privacy Policy
Resources
Cram Mode
AP Score Calculators
Study Guides
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Glossary
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Crisis Text Line
Help Center
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.