a certain quantity, producing anything less would just leave resources idle.
It would leave capital idle, it would leave labor idle, and it
would be more profitable for them to expand output to a higher level.
So there, so that level of output associated with that price is unique.
It's just a particular level of output associated with that price.
Now on the other hand if price is increased, now it would make sense for a
firm to, say, expand its output by maybe paying overtime because the price that
they're going to get for all of those new units of production that they could expand
into are going to justify maybe putting the extra
burden on their capital and their labor resources.
And of course you can tell a similar
story If prices decline, they're going to want to economize
and pull back on those inputs on those
resources that they were, that they were just using,
because those last few workers that they had
working overtime, or the last little extra work they
tried to get out of their machines before you
know, while, while deferring maintenance, for instance, just don't,
don't justify, are no longer justified at this lower price.
So the schedule of quantities supplied at these
various prices is what we call the supply curve.
And the fact that this is an upward sloping curve, that there's a
positive relationship between price and quantity, is
what we call the law of supply.