Market supply refers to the total quantity of a good or service that all producers are willing and able to offer for sale at various prices within a specific market. It is derived by summing the individual quantities supplied by all producers in the market at each price level. A market supply curve is created using a schedule that lists different price-quantity combinations supplied by all producers.
An example is the aggregate supply of smartphones provided by various manufacturers. For instance, in a market with only two smartphone producers, the sum of their supply schedules constitutes the total market supply.
The market supply curve emerges from the combination of individual supply curves, such as those of producers A and B. Similar to the individual supply curve, the market supply curve slopes upward from left to right. The upward slope occurs because higher product prices incentivize producers to augment production, increasing overall market supply, and visa-versa.
The market supply curve furnishes valuable insights into market dynamics, enabling informed decision-making processes.
