Market supply and increase in supply, Microeconomics

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Market supply and Increase in supply:

Market supply is the total quantity of a product that all firms in an industry are willing to offer for sale at a given market price and at a given time period when all other supply factors remain unchanged. The market supply is a horizontal summation of the supplies of all individual firms.

Products have joint supply when the supply of one product is in association of the supply of other products. The other goods are seen as by-products of the main product supplied. Examples are beef and hide (leather), oil and petrol gas and coke.

There is an increase in supply when more of a product id offered for sale than before when the market price has not changed. An increase in supply completely shifts the supply curve to the right and is caused by a change in the other supply factors apart from the market price of the good.

2196_Market supply and Increase in supply.png


From the diagram above, an increase in supply the supply initial supply curve shifts completely from S1S1 to S2S2 and at the same price of the good, quantity supplied has increased from Q1 to Q2.


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