In economics, the law of supply says that a higher price generally increases the quantity producers are willing to supply.
The principle describes a direct relationship between price and quantity supplied, assuming other relevant factors remain unchanged. Higher prices can make production more profitable, encouraging existing firms to produce more and attracting additional sellers into the market. On a standard graph, this relationship is represented by an upward-sloping supply curve.
The law of supply concerns a movement along the same supply curve caused by a price change. It is different from a shift in supply, which results from factors such as input costs, technology, taxes, subsidies, or the number of sellers. A change in one of those factors can alter the quantity supplied at every possible price.
The law is a general tendency, not an exception-free rule. Perishable goods, limited-capacity services, and unusual labor-market situations may behave differently over particular time periods. It is commonly taught alongside the law of demand, which describes buyers’ usual response to price changes.