Supply Curve
Definition
The supply curve represents the relationship between the quantity of a good or service supplied by producers and its price. It shows that as prices increase, producers are willing to supply more of the good or service.
Analogy
Think of the supply curve as an escalator going up. As prices rise, producers step onto this escalator and increase their supply. Just like how more people get on an escalator when it goes up, producers are motivated to provide more goods or services when prices go up.
Related terms
Law of Supply: The principle that states there is a direct relationship between price and quantity supplied.
Shift in Supply Curve: When factors other than price cause changes in the quantity supplied at each price level.
Elasticity of Supply: A measure of how responsive quantity supplied is to changes in price.
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