Individual Producer’s Supply

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Definition of Individual Producer’s Supply:

Individual producer’s supply is the supply curve or schedule for an individual producer.

Detailed Explanation:

Two producers may have different supply curves. Perhaps one has a lower cost to transport a raw material to its plant because of its proximity to the mine. Perhaps another has a great deal of excess capacity, so it can easily increase production without acquiring new equipment or hiring more workers. One may be located in an area with a large pool of unskilled labor. These are reasons why companies may have different individual producer's supplies. The sum of all of the individual producer’s supply curves equals the market supply curve.

Dig Deeper With These Free Lessons:

Supply – The Producer's Perspective
Demand – The Consumer's Perspective
Supply and Demand – Producers and Consumers Reach Agreement
Factors of Production – The Required Inputs of Every Business

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