I n t h I s c h a p t e r y o u w I l L

supply schedule.
Figure 4-5 graphs the relationship between the quantity of ice cream supplied
and the price. The curve relating price and quantity supplied is called the 
supply
curve.
The supply curve slopes upward because, 
ceteris paribus,
a higher price
means a greater quantity supplied.
Ta b l e 4 - 4
B
EN
’
S
S
UPPLY
S
CHEDULE
.
The
supply schedule shows the
quantity supplied at each price.
P
RICEOF
I
CE
-C
REAM
C
ONE
Q
UANTITY OF
C
ONES
S
UPPLIED
$0.00
0
0.50
0
1.00
1
1.50
2
2.00
3
2.50
4
3.00
5
s u p p l y s c h e d u l e
a table that shows the relationship
between the price of a good and the
quantity supplied
s u p p l y c u r v e
a graph of the relationship between
the price of a good and the quantity
supplied
Price of
Ice-Cream
Cone
0
2.50
2.00
1.50
1.00
1 2
3
4
5
6
7
8
9 10 11
Quantity of
Ice-Cream Cones
$3.00
12
0.50
F i g u r e 4 - 5
B
EN
’
S
S
UPPLY
C
URVE
.
This
supply curve, which graphs the
supply schedule in Table 4-4,
shows how the quantity supplied
of the good changes as its price
varies. Because a higher price
increases the quantity supplied,
the supply curve slopes upward.

---

C H A P T E R 4
T H E M A R K E T F O R C E S O F S U P P LY A N D D E M A N D
7 7
M A R K E T S U P P LY V E R S U S I N D I V I D U A L S U P P LY
Just as market demand is the sum of the demands of all buyers, market supply is
the sum of the supplies of all sellers. Table 4-5 shows the supply schedules for two
ice-cream producers—Ben and Jerry. At any price, Ben’s supply schedule tells us
the quantity of ice cream Ben supplies, and Jerry’s supply schedule tells us the
quantity of ice cream Jerry supplies. The market supply is the sum of the two in-
dividual supplies.
Market supply depends on all those factors that influence the supply of indi-
vidual sellers, such as the prices of inputs used to produce the good, the available
technology, and expectations. In addition, the supply in a market depends on the
number of sellers. (If Ben or Jerry were to retire from the ice-cream business, the
supply in the market would fall.) The supply schedules in Table 4-5 show what
happens to quantity supplied as the price varies while all the other variables that
determine quantity supplied are held constant.
Figure 4-6 shows the supply curves that correspond to the supply schedules in
Table 4-5. As with demand curves, we sum the individual supply curves 
horizon-
tally
to obtain the market supply curve. That is, to find the total quantity supplied
at any price, we add the individual quantities found on the horizontal axis of the
individual supply curves. The market supply curve shows how the total quantity
supplied varies as the price of the good varies.
S H I F T S I N T H E S U P P LY C U R V E
Suppose that the price of sugar falls. How does this change affect the supply of ice
cream? Because sugar is an input into producing ice cream, the fall in the price of
sugar makes selling ice cream more profitable. This raises the supply of ice cream:
At any given price, sellers are now willing to produce a larger quantity. Thus, the
supply curve for ice cream shifts to the right.
Whenever there is a change in any determinant of supply, other than the
good’s price, the supply curve shifts. As Figure 4-7 shows, any change that raises
quantity supplied at every price shifts the supply curve to the right. Similarly, any
change that reduces the quantity supplied at every price shifts the supply curve to
the left.
Ta b l e 4 - 5
I
NDIVIDUAL AND
M
ARKET
S
UPPLY
S
CHEDULES
.
The
quantity supplied in a market is
the sum of the quantities
supplied by all the sellers.