The amount of a good that sellers are willing and able to supply at a given price.
1. Quantity supplied
2. Supply curve
3. Supply schedule
4. Law of supply
The correct answer and explanation is:
The correct answer is 1. Quantity supplied.
Quantity supplied refers to the specific amount of a good or service that producers are willing and able to provide at a given price during a particular time period. It is important to note that the quantity supplied is influenced directly by the price of the good. If the price of a good increases, sellers are typically more motivated to produce and supply more of it, assuming other factors remain constant. Conversely, if the price decreases, the quantity supplied tends to decrease as well, as suppliers may not find it profitable to produce or sell as much at the lower price.
This concept is distinct from supply curve and supply schedule, which are related but refer to broader representations. A supply schedule is a table that shows the relationship between different prices and the quantity of the good supplied at each price point. The supply curve is a graphical representation of the supply schedule, typically upward sloping, showing that as the price of the good increases, the quantity supplied also increases. This relationship is based on the law of supply, which states that there is a direct relationship between price and quantity supplied, all else being equal.
The law of supply underlines the idea that producers are more likely to supply more of a good when prices are higher because it increases the potential for profitability. Factors like production costs, technology, and the number of sellers can also influence the quantity supplied, but price is the most direct factor. Therefore, while the supply curve and schedule provide a visual or tabular representation of this relationship, the term “quantity supplied” refers to the actual amount of a good offered for sale at a specific price.