MARKET SUPPLY VERSUS INDIVIDUAL SUPPLY

Just as market demand is the sum of the demands of all buyers, market supply is the sum of the supplies of all sellers. The table in Figure 6 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 individual supplies.

The graph in Figure 6 shows the supply curves that correspond to the supply schedules. As with demand curves, we sum the individual supply curves horizontally 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.

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