Which of the following best describes the concept of supply in microeconomics?

• A. The quantity of a good or service that producers are willing and able to sell at various prices during a given period.
• B. The total amount of goods and services produced in an economy over a year.
• C. The price at which the quantity demanded equals the quantity supplied.
• D. The amount of a good or service that consumers are willing and able to purchase at different prices.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of supply in microeconomics. Supply refers to the relationship between the price of a good or service and the quantity that producers are willing and able to sell over a specific period.
2. Step 2: Recognize that supply is not just a single quantity but a schedule or curve showing quantities supplied at various prices, reflecting producers' responsiveness to price changes.
3. Step 3: Differentiate supply from related concepts: total production (which is aggregate output, not supply), equilibrium price (where supply equals demand), and demand (which relates to consumers, not producers).
4. Step 4: Identify that the correct description of supply must include both willingness and ability of producers to sell, and it must consider various prices over a given time frame.
5. Step 5: Conclude that the best description of supply is: 'The quantity of a good or service that producers are willing and able to sell at various prices during a given period.'