What is Supply?

What is Supply?

What is Supply? Jonathan Poland

Supply refers to the amount of a product or service that is available for purchase at a given price. In economics, the concept of supply is used to understand and analyze various economic phenomena, including production, prices, business cycles, and a range of economic conditions and theories. Firms and individuals who produce goods or provide services are willing to offer them for sale in a market at a certain price, which is known as the supply of that product or service.

Supply Curve

Supply is typically modeled as a curve that shows the quantity of a good that market participants are willing to supply at a particular price level.

Supply & Demand

Supply curves are often modeled together with a demand curve that depicts the quantity that the market is willing to buy at a price. The point where these two graphs intersect is known as an equilibrium price. This represents the price and quantity that would be produced by an efficient market.

Business Cycles

As the price of a good goes up, firms and individuals have incentive to increase supply. This can take time and doesn’t happen immediately as it can require building factories and other facilities such as mines. In many cases, it takes an industry years to adjust to higher prices by increasing supply. Multiple producers may invest in new capital when a price goes up. This can result in a sharp increase in supply months or years later that collapses the price resulting in declining capital investment. Industries commonly go through a cycle of high prices and undersupply followed by investment and a period of low prices and oversupply.

Supply Shocks

A supply shock is a sudden drop in supply due to factors such as war, trade wars, disruptions, disasters or the exit of firms from a market . This can result in a large price increase that occurs quickly.

Types of Supply

Supply can include goods, services, labor, assets, securities and currency.

Maintainability Jonathan Poland

Maintainability

Maintainability refers to the relative ease and cost of maintaining an entity over its lifetime, including fixing, updating, extending, operating,…

Technology Factors Jonathan Poland

Technology Factors

Technology factors are any external changes related to technology that may affect an organization’s strategy. Identifying and analyzing technology factors…

Project Goals Jonathan Poland

Project Goals

Project goals refer to the desired business outcomes that a project aims to achieve. These goals are typically outlined in…

What is an Economic Bad? Jonathan Poland

What is an Economic Bad?

An economic bad refers to a negative outcome or impact that results from business activity and consumption. This is in…

Quality Management Jonathan Poland

Quality Management

Quality management is a process that ensures products and services meet certain standards of quality before they are released to…

The Power of Compound Interest Jonathan Poland

The Power of Compound Interest

Traditional finance will explain compound interest as the interest paid on a loan or deposit calculated based on both the…

Tactical Risk Jonathan Poland

Tactical Risk

Tactical risk refers to the potential for losses due to changes in business conditions in real-time. Tactics differ from strategy…

Personal Selling Jonathan Poland

Personal Selling

Personal selling is a type of sales approach that involves face-to-face interaction with potential customers. Unlike other forms of sales,…

Fair Competition Jonathan Poland

Fair Competition

Fair competition refers to competition between businesses that is open and equitable, allowing all participants to compete on an equal…

Learn More

Collectables Jonathan Poland

Collectables

Collectables, also known as collectibles or antiques, are items that are valued for their rarity, historical significance, or aesthetic appeal.…

Internal Benchmarking Jonathan Poland

Internal Benchmarking

Internal benchmarking is the process of comparing the performance of one aspect or function within a company to another aspect…

Distribution Jonathan Poland

Distribution

Distribution is the process of making a product or service available for use or consumption by consumers or businesses. It…

Positive Feedback Loop Jonathan Poland

Positive Feedback Loop

A positive feedback loop is a situation where an initial change or input (A) leads to a further change or…

Change Strategy Jonathan Poland

Change Strategy

Change strategy is the process of planning and implementing change within an organization in a systematic and effective manner. It…

Trade Secret Jonathan Poland

Trade Secret

A trade secret is a type of carefully guarded information that gives a company a competitive advantage in the market.…

Product Benefits Jonathan Poland

Product Benefits

A product benefit is the value that a customer derives from a product or service. It is what makes the…

Intuitive Surgical Jonathan Poland

Intuitive Surgical

Intuitive Surgical is a medical technology company that designs, manufactures, and markets advanced surgical robotic systems. The company was founded…

Maintainability Jonathan Poland

Maintainability

Maintainability refers to the relative ease and cost of maintaining an entity over its lifetime, including fixing, updating, extending, operating,…