In simple terms
A friendly intro before the formal notes — no formulas yet.
Supply
Supply is how much producers will sell at each price. Higher prices tempt them to sell more, so the curve slopes upward. Anything that changes their costs or numbers shifts the whole curve.
Street-food stalls appear when prices are high enough to make a profit and pack up when they are not. Cheaper ingredients bring more stalls at every price — the curve shifts; a busier evening that lets stalls charge more just moves them along it.
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Supply is the quantity producers are willing and able to sell at each price.
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A higher price raises profit, so quantity supplied rises — the curve slopes up.
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A change in costs, technology, taxes, weather or the number of producers shifts the curve.
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A change in the product's own price only moves the market along the curve.
Explore the concept
Use the live diagram, PhET or GeoGebra sim, and synced steps — play it, drag controls, or tap a step.
Step-synced diagram — highlights what to look for in the simulation above.
At a glance — side by side
Compare key properties side by side — ideal for exam contrasts.
Movement along the supply curve versus a shift of the curve
| Feature | Movement along the curve | Shift of the curve |
|---|---|---|
| Cause | A change in the product's own price | A change in a condition of supply such as costs, technology or taxes |
| Name | Extension (price up) or contraction (price down) | Increase (right shift) or decrease (left shift) in supply |
| What happens to the curve | The curve stays where it is | A new curve is drawn to the right or left |
| Quantity at other prices | Unchanged | Different at every price |
| Typical exam trigger | A shift in demand changing the price | A tax, subsidy, new technology, harvest or change in costs |
Cause
Movement along the curve
Shift of the curve
Name
Movement along the curve
Shift of the curve
What happens to the curve
Movement along the curve
Shift of the curve
Quantity at other prices
Movement along the curve
Shift of the curve
Typical exam trigger
Movement along the curve
Shift of the curve
Full topic notes
Formal explanation with the rigour you need for the exam.
What supply is and the law of supply
Supply is the quantity of a product that producers are willing and able to offer for sale at a given price over a period of time. Like demand, it is a relationship between price and quantity, not a single number, and it refers to a period — supply per week or per year.
The law of supply states that, other things being equal, a higher price leads to a higher quantity supplied. Higher prices make production more profitable, cover the higher costs of producing extra units, and attract new producers. The supply curve therefore slopes upward from left to right.
Supply = the quantity producers are willing and able to sell at each price over a period.
Law of supply: price up → quantity supplied up, other things being equal.
Reason: higher prices raise profit and cover the cost of extra output.
The supply curve slopes upward from left to right.
Individual supply and market supply
An individual supply curve shows one producer's supply. The market supply curve adds together the quantities every producer would offer at each price — a horizontal sum. If three farms would supply 100, 150 and 250 tonnes of rice at $400 a tonne, market supply at that price is 500 tonnes.
Market supply is what interacts with market demand to set the price. Because it is a sum, anything that changes the number of producers — new firms entering, old ones closing — changes market supply even if each firm's behaviour is unchanged.
Market supply = the sum of all individual producers' supply at each price.
At any price, add the quantities, not the prices.
More producers in the market → greater market supply at every price.
A market supply schedule can be drawn as a market supply curve.
When a question gives a supply schedule (a table), plot price on the vertical axis and quantity on the horizontal axis, and label the curve S. Marks are lost for unlabelled axes more often than for a wobbly line.
The conditions of supply
A change in the product's own price causes a movement along the curve. A change in anything else that affects producers — the conditions of supply — shifts the whole curve. Supply shifts right (more at every price) when costs of production fall, technology improves, a subsidy is paid, the weather is good for farm output, or the number of producers rises. Supply shifts left when costs rise, an indirect tax is imposed, bad weather or disease strikes, or producers leave.
The prices of other products matter too. If a farmer can grow wheat or barley on the same land, a rise in the price of barley reduces the supply of wheat — resources are switched. Products produced together, such as beef and leather, move the other way: more beef means more leather.
Conditions of supply: costs of production, technology, taxes and subsidies, weather and natural events, number of producers, prices of related products.
Lower costs, better technology, subsidies, good harvests and more producers → supply shifts right.
Higher costs, indirect taxes, bad harvests and fewer producers → supply shifts left.
Competitive supply (wheat vs barley) and joint supply (beef and leather) link the supply of different products.
Movement along versus shift of the supply curve
A movement along the supply curve is caused only by a change in the product's own price. A rise in price causes an extension of supply (more supplied); a fall causes a contraction. The curve itself does not move.
A shift of the supply curve is caused by a change in a condition of supply. After a shift, a different quantity is supplied at every price. In an exam, an extension or contraction is usually the result of a shift in demand: demand rises, price rises, and supply extends along the existing curve.
Movement along the curve: caused by a change in the product's own price (extension or contraction).
Shift of the curve: caused by a change in a condition of supply.
Right shift = increase in supply; left shift = decrease in supply.
A demand shift causes a movement along the supply curve, not a shift of it.
Before drawing, ask: 'Did the price of this product change, or did something else change?' Own price → move along. Anything else → shift. Then state the direction and the effect on equilibrium price and quantity.
Worked examples
See the formulas applied — reveal one step at a time, like the exam.
For each of the following, state whether the supply of the product shifts left or right and explain the effect on equilibrium price and quantity.
(a) The government places a tax of $2 per litre on sugary drinks. (b) A new machine halves the cost of producing solar panels. (c) A drought destroys part of the rice harvest.
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Step 1 — Tax on sugary drinks (a): an indirect tax raises producers' costs, so supply shifts left (S₁ → S₂). Equilibrium price rises and quantity falls.
The market for coffee beans has the following demand and supply functions, where P is the price in dollars per kilogram:
Qd = 200 − 10P Qs = 50 + 5P
(a) Calculate the equilibrium price and quantity. (b) A subsidy to growers changes supply to Qs = 80 + 5P. Calculate the new equilibrium. (c) Explain why the subsidy shifts the supply curve rather than causing a movement along it.
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Step 1 — Equilibrium (a): 200 − 10P = 50 + 5P → 150 = 15P → P = $10. Quantity = 200 − 10(10) = 100 kg.
How it all connects
The big idea sits in the middle — tap a linked idea to explore the link.
Tap a linked idea to see how it connects back to the main topic — that connection is what examiners reward.
Glossary
Key terms for this topic — skim now; the Check step will test them.
- Supply
Supply is the quantity of a product that producers are willing and able to offer for sale at a given price over a period of time.
- law of supply
The law of supply states that, other things being equal, a higher price leads to a higher quantity supplied.
- conditions of supply
Shifts the whole curve. Supply shifts right (more at every price) when costs of production fall, technology improves, a subsidy is paid, the weather is good for farm output, or the number of producers rises.
- right
Supply shifts right (more at every price) when costs of production fall, technology improves, a subsidy is paid, the weather is good for farm output, or the number of producers rises.
- Market supply
The total quantity all producers in a market would supply at each price — the sum of the individual supply curves.
- Extension of supply
A rise in quantity supplied caused by a rise in the product's own price — a movement up along the supply curve.
- Contraction of supply
A fall in quantity supplied caused by a fall in the product's own price — a movement down along the supply curve.
- Joint supply
When producing one good automatically produces another, such as beef and leather, so more of one means more of the other.
- Competitive supply
When the same resources can make either of two products, such as wheat or barley, so more of one means less of the other.
Name it
Read the meaning, then pick which of this lesson’s terms it describes. Miss one and you see what your choice really means.
When the same resources can make either of two products, such as wheat or barley, so more of one means less of the other.
Quick check
Write your answer first, then compare it with the model one — the gap is what you would have lost.
Teach it back
If you can explain it simply, you own it — gaps here are marks you’d lose.
Teach it back
Explain this topic as if teaching a friend. We name the gaps an examiner would still dock.
Revision flashcards
Guess first, then flip — retrieval beats re-reading.
Key takeaways
Review these before you close the topic — retrieval beats re-reading.
Supply = the quantity producers are willing and able to sell at each price over a period.
Law of supply: price up → quantity supplied up, other things being equal.
Reason: higher prices raise profit and cover the cost of extra output.
The supply curve slopes upward from left to right.
Practice — then mark it
The whole point: a real Cambridge question, marked mark-by-mark.
Mark a supply question
Mark a supply question
Extra simulations & links
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Frequently asked
Checkpoint
One marked question is worth ten re-reads — close the loop before you move on.
Reading it isn’t knowing it — prove it.
Before you move on: do Mark a supply question on paper, snap a photo, and get examiner-style feedback on exactly where you win and lose marks.
Discuss Supply
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