Supply is the quantity of a good or service that producers are willing to offer at various prices. Higher prices usually bring more supply. Lower prices bring less. The relationship is shown as an upward-sloping curve on a graph.

Supply depends on costs. If inputs get cheaper, producers can supply more at the same price. If wages or materials rise, supply shrinks. Technology, taxes, and regulations all shift the curve. A new machine can increase supply without raising prices. A new tax can reduce it.

Supply and demand meet at equilibrium. When supply exceeds demand, prices fall. When demand exceeds supply, prices rise. The adjustment is rarely instant. Farms plant once a year. Factories take months to build. In the short run, supply is often fixed. In the long run, it responds.

Factors that shift supply

• Input costs
• Technology
• Taxes and subsidies
• Number of producers
• Expectations about future prices