Supply facts for kids

In economics, supply is how much of a product or service businesses are ready to sell. It's about what they have available for customers. The law of supply and demand helps figure out the price of things. This law shows how much people want something and how much is available.

What Changes How Much Is Supplied?

Many things can make a business want to sell more or less of a product. Here are some common reasons:

• Cost of Making Things: This means how much it costs to get the materials and workers needed. If these costs go up, it's more expensive to make the product. So, businesses might make less of it. This means less supply.
• How Well Things Are Made: When businesses find better ways to make things, they can produce more. This could be from new technology or better training for workers. When they produce more with the same effort, the supply increases.
• Government Rules: Governments can affect supply in two main ways.
  • Help from the Government (Subsidies): If the government gives money to businesses, it makes it cheaper to produce things. This is called a subsidy. Businesses can then make more, and supply goes up.
  • Taxes from the Government: If the government adds a tax, it makes production more expensive. Businesses might then make less, and supply goes down.
• Number of Businesses: When more businesses start making a product, there's more of it available. This increases the total supply. Also, if a business gets bigger, it might be able to make things more cheaply. This can also lead to more supply.
• Unexpected Problems (Supply Shocks): Sometimes, big events can suddenly change supply.
  • Natural Disasters: Things like earthquakes or big storms can destroy factories. They can also stop workers from doing their jobs. This means less product can be made.
  • Human-Made Problems: Problems like worker strikes can also stop production. When these things happen, the supply of goods goes down.

There are other things that can affect supply too. It really depends on if a seller wants to make and sell a product.