The Supply Schedule and the Supply Curve

A supply schedule shows how much of a good or service would be supplied at different prices.

The table in Figure 3-6 shows how the quantity of natural gas made available varies with the price—that is, it shows a hypothetical supply schedule for natural gas.

The Supply Schedule and the Supply Curve The supply schedule for natural gas is plotted to yield the corresponding supply curve, which shows how much of a good producers are willing to sell at any given price. The supply curve and the supply schedule reflect the fact that supply curves are usually upward sloping: the quantity supplied rises when the price rises.

A supply schedule works the same way as the demand schedule shown in Figure 3-1: in this case, the table shows the number of BTUs of natural gas producers are willing to sell at different prices. At a price of $2.50 per BTU, producers are willing to sell only 8 trillion BTUs of natural gas per year. At $2.75 per BTU, they’re willing to sell 9.1 trillion BTUs. At $3, they’re willing to sell 10 trillion BTUs, and so on.

A supply curve shows the relationship between quantity supplied and price.

In the same way that a demand schedule can be represented graphically by a demand curve, a supply schedule can be represented by a supply curve, as shown in Figure 3-6. Each point on the curve represents an entry from the table.

Suppose that the price of natural gas rises from $3 to $3.25; we can see that the quantity of natural gas producers are willing to sell rises from 10 trillion to 10.7 trillion BTUs. This is the normal situation for a supply curve, that a higher price leads to a higher quantity supplied. So just as demand curves normally slope downward, supply curves normally slope upward: the higher the price being offered, the more of any good or service producers will be willing to sell.