What does the supply curve represent?

The supply curve represents a graphical depiction of the relationship between the price of a good and the quantity supplied by producers. It illustrates how much of a good or service suppliers are willing to offer at various price points. The fundamental principle here is that as the price increases, the quantity supplied typically increases as well, reflecting the incentive for producers to manufacture and sell more at higher prices due to the potential for greater profit.

This concept is rooted in the law of supply, which states that there is a direct relationship between price and quantity supplied, meaning that higher prices motivate producers to produce more. Conversely, if prices fall, the quantity supplied tends to decrease, as the incentive for producers diminishes. Understanding this relationship is crucial for analyzing how market dynamics function and how changes in price can impact overall supply in a marketplace.