In microeconomics, what is a supply curve?

• A. A graph showing the relationship between consumers’ income and the quantity of a good demanded, holding the price of the good constant.
• B. A graph showing the relationship between the price of a good and the quantity of that good that producers are willing and able to sell over a given time period, holding other factors constant.
• C. A graph showing the relationship between the price of a good and the quantity of that good that consumers are willing and able to buy over a given time period, holding other factors constant.
• D. A graph showing the relationship between the quantity of a good produced and the marginal cost of production, regardless of the good’s market price.

Answer: (B)

Verified step by step guidance

1. Understand that a supply curve represents the behavior of producers in a market, showing how much of a good they are willing and able to sell at different prices.
2. Recognize that the supply curve plots the relationship between the price of a good (on the vertical axis) and the quantity supplied (on the horizontal axis).
3. Note that the supply curve assumes other factors affecting supply (like technology, input prices, and number of sellers) are held constant, which is known as the ceteris paribus condition.
4. Distinguish the supply curve from the demand curve, which relates price to quantity demanded by consumers, not producers.
5. Remember that the supply curve typically slopes upward, reflecting that higher prices incentivize producers to supply more of the good.