Supply is a fundamental concept in economics that focuses on the behavior of sellers or suppliers in the market. The terms "suppliers," "sellers," and "producers" are often used interchangeably. Just as we discussed quantity demanded (QD), we now introduce quantity supplied (QS), which refers to the amount of a good that sellers are willing to produce at various price levels.

At any given price, there exists a corresponding quantity that will be supplied, which is outlined in a supply schedule. This schedule lists the quantity supplied at different prices, illustrating the relationship between price and quantity supplied. The law of supply states that when the price of a good rises, the quantity supplied also rises, indicating a directly proportional relationship. Conversely, if the price decreases, the quantity supplied will also decrease. This relationship makes intuitive sense; higher prices incentivize sellers to produce more of a good, as they can earn greater revenue.

The graphical representation of this relationship is known as the supply curve, which plots price on the vertical (y) axis and quantity supplied on the horizontal (x) axis. The supply curve typically slopes upward, reflecting the positive correlation between price and quantity supplied. A mnemonic to remember this is that while demand curves slope downward, supply curves slope upward.

For example, consider a supply schedule for wheat: at a price of $9, the quantity supplied might be 60,000 units. As the price decreases, the quantity supplied will also decrease, demonstrating the law of supply in action. By connecting the points from the supply schedule on a graph, we can visualize the upward-sloping supply curve, reinforcing the concept that higher prices lead to greater quantities supplied.