Market Supply Curve
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Definition of a Market Supply Curve:
A market supply curve is the supply curve of all producers or the sum of all individual producer's supply curves.
The market supply curve is a graph detailing how much of a good or service all the producers would furnish at different prices. It slopes upward to the right because producers are enticed to produce more at higher prices because their profits would increase. The market supply curve is steeper in the short run than in the long run. A steep curve indicates there is little flexibility in the production process. Price changes have little impact on the quantity produced. For example, if the price of corn increases, farmers are unable to immediately grow more corn. However, next year they could substitute corn for another crop. A "supply curve" is normally assumed to be the market supply curve unless an individual producer is specified.
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