In economics, supply refers to the total amount of a specific good or service that is available to consumers at a given period and a given price level. It is the amount of a certain good that a seller is willing and able to provide to buyers. Supply can relate to the amount available at a specific price or the amount available across a range of prices. For example, grocery stores may measure their market supply of fresh produce on a daily basis, while the supply of wheat, milk, and vegetables are examples of products that suppliers can provide on a daily basis.
The concept of supply is complex and is often broken down into short-term and long-term supply, though there are other types of supply. The supply function and equation express the relationship between supply and the affecting factors, and a wealth of information can be gleaned from a supply curve, such as movements and shifts caused by changes in price or other factors.
The law of supply is a fundamental concept in economics that states that, all other factors being equal, as the price of a good or service increases, the quantity of that good or service supplied will increase. For example, if consumers start paying more for cupcakes than for donuts, bakeries will increase their output of cupcakes and reduce their output of donuts to increase their profits.
Factors that affect supply include changes in manufacturing costs, consumer preferences, government subsidies, and extreme weather. Supply-side economics is a theory that claims that increasing production will drive economic growth, and it advocates for incentives to businesses by giving tax cuts and deregulation so that they can expand.
