#AP Macroeconomics: Supply - Your Ultimate Review 🚀

Hey! Let's get you prepped for the AP Macro exam with a focused review of supply. Think of this as your cheat sheet for the night before the test. Let's make sure you're not just memorizing, but understanding.

# Unit 1: All About Supply

#What is Supply? 🤔

Supply refers to the various quantities of a good or service that firms are willing and able to produce at different price levels. It's all about what businesses are ready to offer to the market. Understanding supply is essential to grasping how market prices are determined. 🏷️

#Quantity Supplied vs. Supply

• Quantity Supplied: This is a specific amount of a good or service that's produced at a particular price. It's a single point on the supply curve.
• Supply: This is the entire relationship between price and quantity supplied. It's the whole curve, showing how much firms will offer at all possible prices.

Think of it this way: Quantity supplied is like a single dot on a graph, while supply is the entire line connecting all the dots. 📈

Here's a visual to help:

Caption: The supply curve shows the relationship between price and quantity supplied. Points A, B, and C represent different quantities supplied at different prices.

#The Law of Supply

The law of supply states that there is a direct (positive) relationship between price and quantity supplied. In simple terms:

• Price ↑, Quantity Supplied ↑ (Producers want to sell more when prices are high)
• Price ↓, Quantity Supplied ↓ (Producers will reduce production when prices drop)

It's like a natural incentive for businesses. When prices go up, they're eager to produce more; when prices go down, they cut back.

Let's look at another graph:

Caption: As the price increases from 100 to 110, the quantity supplied increases from 50 to 90, illustrating the law of supply.