Increase in Supply

Definition

An increase in supply refers to a situation where producers are able and willing to offer more of a product at each price level. This can be caused by factors such as technological advancements, lower production costs, or an increase in the number of suppliers.

Analogy

Imagine you're at a pizza party and suddenly the number of pizzas being brought in doubles. There is now an increase in supply because there are more pizzas available for everyone to enjoy.

Related terms

Shift in Supply Curve: A shift in the supply curve occurs when there is a change in any factor other than price that affects the quantity supplied at each price level.

Elasticity of Supply: Elasticity of supply measures how responsive the quantity supplied is to changes in price.

Producer Surplus: Producer surplus is the difference between what producers are willing to sell a good for and what they actually receive from selling it.