Graphing the Supply Curve

A supply curve slopes upward from the bottom left to the upper right of the diagram. At higher prices, firms are willing and able to sell more than at lower prices. We say that there is a direct relationship between price and quantity supplied.

The above diagram shows that on supply curve S, suppliers supply 6 units of this product when the price is \$7 (point A) and 11 units when the price is \$14 (point B).

An Individual Firm’s Supply Curve for Gasoline

Below is an example of a hypothetical supplier’s supply schedule for gasoline. The supplier is willing and able to sell the quantities at the respective prices.

 Price per Gallon Total Number of Gallons Supplied Per Month (Quantity Supplied) \$5.00 3,500 \$4.50 3,000 \$4.00 2,500 \$3.50 2,000 \$3.00 1,500 \$2.50 1,000

A graph of this individual supplier’s demand schedule for gasoline looks like this:

The Market Supply Curve for Gasoline

A supply curve for the entire market of this product is simply the sum of every individual supplier’s supply schedule. For example, if the market for gasoline consists of 10 suppliers, then the market supply schedule looks as follows (for simplicity, we assume that every supplier’s supply schedule is identical to the individual supplier in the previous paragraph; compared to the table above the numbers in the quantity column are multiplied by 10 because there are 10 suppliers):

 Price per Gallon Total Number of Gallons Purchased Per Month (Quantity Demanded) \$5.00 35,000 \$4.50 30,000 \$4.00 25,0000 \$3.50 20,000 \$3.00 15,000 \$2.50 10,000

Based on the numbers in the table above, the graph of the market supply schedule for gasoline looks like this:

For a video explanation of how to graph a supply curve, please watch: