In economics, what does the term 'supply' refer to?

In economics, what does the term 'supply' refer to?

• A. The amount consumers are willing to buy at varying prices
• B. The amount producers are willing to sell at varying prices
• C. The value of money
• D. The number of workers in an industry

Answer: (B)

Supply is about how much producers are willing to offer for sale at different prices, holding other factors constant. This captures the idea that higher prices give firms more incentive to produce and sell more, so the quantity supplied tends to increase as price rises (the law of supply). We represent this relationship with a supply schedule or supply curve that shows the quantities firms would supply at each price. The other options describe demand (what consumers are willing to buy at various prices), the value of money (purchasing power), or the size of the workforce, none of which define supply.

Supply is about how much producers are willing to offer for sale at different prices, holding other factors constant. This captures the idea that higher prices give firms more incentive to produce and sell more, so the quantity supplied tends to increase as price rises (the law of supply). We represent this relationship with a supply schedule or supply curve that shows the quantities firms would supply at each price. The other options describe demand (what consumers are willing to buy at various prices), the value of money (purchasing power), or the size of the workforce, none of which define supply.