IBonomicsSupply CurveSL
MicroeconomicsA basic diagram showing the positive relationship between price and quantity supplied, illustrating the law of supply.
Curves and elements
- Supply Curve
- Shows the positive relationship between price and quantity supplied. Slopes upward from left to right.
- Price change
- A rise in price from P1 to P2 causes movement along the supply curve.
- Quantity change
- Quantity supplied increases from Q1 to Q2 as price increases.
Key explanations
- 1
The supply curve slopes upward from left to right, showing that producers are willing to supply more at higher prices.
- 2
When price rises from P1 to P2, quantity supplied increases from Q1 to Q2.
- 3
This movement along the supply curve is caused by a change in price, not a shift in supply.
- 4
The positive relationship between price and quantity supplied is known as the law of supply.
Example exam question
Explain how a rise in the price of a good affects quantity supplied, using a supply curve diagram.
Show example answer
A rise in price from P1 to P2 causes an extension in supply, increasing quantity supplied from Q1 to Q2, all things being equal.
