What does a supply curve depict?

A supply curve depicts a graphical representation of the relationship between price and quantity supplied. As the price of a good or service increases, suppliers typically are willing to produce and sell more of it, which reflects the fundamental principle of supply in economics. This direct relationship is critical for understanding how markets operate.

The upward slope of the supply curve indicates that higher prices incentivize greater production, allowing businesses to cover costs and achieve higher profits. Conversely, at lower prices, the quantity supplied would generally decrease, as producers may find it less profitable to sell their goods at those prices. Thus, the supply curve is essential for visualizing how changes in market prices can affect the quantity of goods that suppliers are willing to offer.

Understanding this relationship helps to analyze market behaviors, predict changes in supply due to external factors such as shifts in production costs or technological advances, and identify equilibrium points where supply meets demand.