Supply
Definition of 'Supply'A fundamental economic concept that describes the total amount of a specific good or service that is available to consumers. Supply can relate to the amount available at a specific price or the amount available across a range of prices if displayed on a graph. This relates closely to the demand for a good or service at a specific price; all else being equal, the supply provided by producers will rise if the price rises because all firms look to maximize profits. |
|
Investopedia explains 'Supply'Supply and demand trends form the basis of the modern economy. Each specific good or service will have its own supply and demand patterns based on price, utility and personal preference. If people demand a good and are willing to pay more for it, producers will add to the supply. As the supply increases, the price will fall given the same level of demand. Ideally, markets will reach a point of equilibrium where the supply equals the demand (no excess supply and no shortages) for a given price point; at this point ,consumer utility and producer profits are maximized. |
Related Definitions
Articles Of Interest
-
Why You Can't Influence Gas Prices
Don't believe the water-cooler talk. Big oil companies aren't to blame for high prices. -
Understanding Supply-Side Economics
Does the amount of goods and services produced set the pace for economic growth? Here are the arguments. -
The Minimum Wage: Does It Matter?
Despite paying one of the highest minimum wages in the world, the minimum wage is a perpetual hot potato among politicians in the United States. -
Top 4 Things That Determine A Home's Value
Your house depreciates over time, while the land beneath it is likely to do the opposite. -
What causes a significant move in the stock market?
There is a nearly infinite number of factors that can cause the stock market to move significantly in one direction or another. This can include such things as economic data, geopolitical events ... -
Leading Economic Indicators Predict Market Trends
Leading indicators help investors to predict and react to where the market is headed. -
5 ETFs Flaws You Shouldn't Overlook
Despite their popularity, exchange traded funds have some drawbacks that investors should know about. -
Great Company Or Growing Industry?
Look at the big picture when choosing a company - what you see may really be a stage in its industry's growth. -
Using The Price-To-Book Ratio To Evaluate Companies
The P/B ratio can be an easy way to determine a company's value, but it isn't magic! -
Prisoner's Dilemma
Learn more about this classic game theory scenario.
Free Annual Reports