supply curve


A graph showing the hypothetical supply of a product or service that would be available at different price points. The supply curve usually slopes upward, since higher prices give producers an incentive to supply more in the hope of making greater revenue. In the short run the price-supply tradeoff is greater than in the long run. In the short run, an increase in price will usually cause an increase in supply, but the leading producers can only manage a limited increase. However, in the longer term, new producers enter the market attracted by higher prices, and the supply at each price increases more significantly.
In theory, in the most extreme cases, supply can be totally unreactive to price (special cases of very uncompetitive markets), or supply can be infinite at a particular price (e.g. a highly competitive market).

Use supply curve in a sentence

When my company saw that oil prices were going up, it decided to start producing more oil to adhere to the supply curve.

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You need to follow things all the way through the supply curve so that you know where there are any leaks.

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The supply curve needed to be paid a lot of attention to because it was crucial to our well being as a company.

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supply schedule aggregate supply curve