framboðsskúrfunni

The framboðsskúrfunni, often translated as the supply curve, is a fundamental concept in microeconomics representing the relationship between the price of a good or service and the quantity that producers are willing and able to supply at that price. Generally, as the price of a good increases, the quantity supplied also increases, assuming all other factors remain constant. This positive relationship is depicted as an upward-sloping curve on a graph, with price on the vertical axis and quantity on the horizontal axis.

Several factors can cause a shift in the supply curve, meaning a change in the quantity supplied at every price level. These include changes in the cost of inputs, such as labor or raw materials, technological advancements that make production more efficient, the number of sellers in the market, government policies like taxes or subsidies, and expectations about future prices. For instance, a decrease in production costs would shift the supply curve to the right, indicating that more goods can be supplied at any given price. Conversely, an increase in input costs would shift the curve to the left.

The interaction between the supply curve and the demand curve determines the market equilibrium price and quantity. Equilibrium occurs at the point where the quantity demanded by consumers equals the quantity supplied by producers. Understanding the supply curve is crucial for analyzing market dynamics, predicting price changes, and evaluating the impact of various economic policies.