Supply

Allocation of Resources · 4 question types

Practise

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Exam Frequency Analysis

Past paper frequency (2018 to 2024)

This topic accounts for approximately 18% of your exam marks.

stable

Very High

Stable18%

Supply appears alongside demand on virtually every paper; cost changes, technology, and taxes/subsidies are the most tested supply shifters.

Supply is the quantity of a good or service that producers are willing and able to offer for sale at a given price over a given time period.

The mirror of the demand definition. Two parts are essential.

Willing. The producer is prepared to sell at the price on offer.
Able. The producer has the resources to actually produce the good (capital, raw materials, labour). A firm without the inputs is not part of supply.

Like demand, supply is always measured over a time period (per day, per month, per year) and at a specific price or across a range of prices.

A definition that says "everything the firm has in stock" or "the amount in the warehouse" loses both marks. Supply is the quantity offered for sale at a price, not inventory.