Diagrams that illustrate movements along a supply curve
The Allocation of Resources – Supply
What is a Supply Curve?
A supply curve shows the relationship between the price of a good (on the vertical axis) and the quantity that producers are willing to sell (on the horizontal axis). The curve is usually upward‑sloping because higher prices give producers an incentive to produce more.
Moving Along the Supply Curve
When the price changes but the underlying conditions (technology, input costs, etc.) stay the same, the movement is along the supply curve. This is called a change in quantity supplied (not a shift).
Illustrating the Movement
Below is a simple SVG diagram of a supply curve. The blue arrow shows how the quantity supplied changes when the price rises from $P_1$ to $P_2$.
Analogy: The Coffee Shop
Imagine a small coffee shop that sells lattes. If the price of a latte rises from $3 to $5, the shop will sell more lattes because each latte now brings in more profit. The increase in sales is a movement along the supply curve, not a shift.
Supply Schedule Example
Below is a simple supply schedule for a local bakery. Notice how the quantity supplied changes as price changes.
| Price ($) | Quantity Supplied (loaves) |
|---|---|
| 2 | 10 |
| 3 | 15 |
| 4 | 22 |
| 5 | 30 |
Key Takeaway
When the price of a good changes and all other factors stay the same, producers adjust the quantity they supply. This is a movement along the supply curve, not a shift. Understanding this difference is crucial for answering exam questions about supply.
Revision
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