Quantity Supplied

Published Jan 14, 2023

Definition of Quantity Supplied

Quantity supplied is the amount of a good or service that a producer is willing and able to supply at a given price. That means it is the number of units of a product or service that a producer is willing to sell at different price levels. It is important to note that the quantity supplied is not necessarily the same as the amount that is actually sold in the market because that also depends on the quantity demanded.

Example

To illustrate this, let’s look at the market for apples. Let’s assume the current market price of apples is USD 2.00 per pound. Now, let’s assume a farmer is willing to sell 10 pounds of apples at this price. That means the quantity supplied by this farmer at a price of USD 2.00 is 10 pounds. Now, if the price of apples increases to USD 3.00 per pound, the farmer is willing to sell 15 pounds. Thus the quantity supplied at this price increases to 15 pounds.

Why Quantity Supplied Matters

Quantity supplied is an important concept in economics because it helps to explain how markets work. It is closely related to the concept of supply and demand since it describes the amount of a good or service that a producer is willing to supply at a certain price. Thus, it is an important factor in determining the equilibrium price and quantity in a market.

In addition to that, it is also important for policymakers because it helps them to understand how changes in the price of a good or service can affect the amount that is supplied.