supply curve

supply curve

The law of supply and demand is at the very core of most economic matters. The law of demand looks at the economy more from the consumer's side, while the law of supply involves the relationship between the price of goods and the quantity made available for purchase. The graph used to diagram the interrelating of these two factors depicts the supply curve. If everything else is constant and in balance, as price increases, so does production. The slope then is an upward one.

Shifts in the supply curve can occur to the left or to the right. Shifts to the right are considered better for the producer of goods because they indicate he or she is making more of a profit. A number of factors can cause shifts, including technological advances, how many sellers are in the market and the cost of other goods.

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