Law of supply

Welcome, everyone. Today, we're exploring the law of supply, a central idea in economics that affects everything from everyday consumer goods to complex markets like real estate or technology. At its essence, the law of supply describes how producers respond to changing prices. It states that all else equal, as the price of a good or service increases, the quantity supplied by businesses increases as well. This forms the familiar upward sloping supply curve often seen in economics lectures. Firms are motivated by profit. So when market prices rise, producing becomes more attractive, encouraging suppliers to allocate more resources to production. To understand why the supply curve rises as prices rise, let's look at what happens inside a business. Imagine a shirt manufacturer. If the selling price of shirts goes up while costs stay steady, the potential profit per shirt grows. The firm will likely ramp up production to take advantage of the increased profit margins. Yet, as more output is produced, costs can begin to climb. Overtime may need to be paid or less efficient workers and materials may be brought in. This explains why the supply curve is not just upward sloping, but often gets steeper, reflecting higher costs as firms expand production. In both the United Kingdom and the United States, these dynamics hold true across many industries. While price is the primary driver along a supply curve, other factors called non price determinants