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Supply
 

 

The flow of goods and services into a market which is available to meet demand. For example, the supply of petrol is the amount of petrol which sellers are prepared to sell over some specific time period, e.g. week. it should be emphasized that 'supply' refers to the quantity of a good that sellers wish, plan or seek to sell, rather than the amount actually sold, which may well be different if the market is not in equilibrium. An important determination of the supply of any good is its price. In general, we would expect that the higher the price the greater the supply. Other important determinants would be costs of production, taxes or subsidies. The general importance of the concept of supply is that it refers to one set of forces which jointly determine the market price and quantity traded, the other of course being those forces grouped under the heading 'demand'.

Reference: The Penguin Dictionary of Economics, 3rd edt.