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2. Supply

Supply refers to the quantity of a good or service that producers are willing and able to sell at various prices over a given period.

Law of Supply:

  • As the price of a good increases, the quantity supplied increases, and vice versa.

Factors Affecting Supply:

  • Production Costs: Higher costs reduce supply.
  • Technology: Technological advances can increase supply.
  • Government Policies: Taxes and subsidies affect supply.

Real-Life Example:​

During a drought, the supply of agricultural products like wheat decreases because of poor growing conditions, leading to higher prices in the market.