There's a reason they call economics the "dismal science." Economic terms that sound almost identical, such as "supply" and "quantity supplied" have different meanings. "Supply" is a big-picture concept, the amount of product or services that businesses are potentially willing to sell. "Quantity supplied" is small-picture, a specific amount of product traded at a specific time.
"Supply” is the economic term for all the products or services that a company might bring to the market. "Quantity supplied" is much narrower, and indicates the quantity of product supplied at a specific price.
What is the Meaning of Supply?
The supply of most products or services isn't set in stone. The available supply of, say, sriracha sauce or copies of Stephen King's new novel depends on price rather than the physical limits of making more. If the sriracha supply runs short and the price rises, producers may be willing to increase the supply as long as they can sell it at the higher price.
The supply curve you sometimes hear economists talk about measures the relationship between price and supply. Economists plot the curve out using a graph, with price along one side and the quantity of product along the other. The curve demonstrates visually how the increase in price affects the supply. The simple relationship may not represent the real world accurately though. Changes in production costs, new sellers entering the market and other factors can complicate things beyond the neat and tidy supply curve.
What is the Meaning of Quantity Supplied?
"Quantity supplied" is a snapshot of one specific point on the supply curve. For example, if the current price of ground chuck is $3.56 per pound, you can check the supply curve and see exactly what the quantity supplied would be. If the price drops to $3, the point shifts and the quantity supplied becomes smaller.
Understanding the Concept of Price Elasticity
In theory, as soon as the price goes up the quantity supplied should change to a different point on the graph. In practice, it's a lot more complicated. One of the factors that complicate things is "price elasticity of supply" which is how much the quantity supplied can really change.
If the supply is elastic, it's easy for producers to increase the quantity supplied in response to a change in price. With an inelastic supply, it's hard for businesses to adjust production to a new level. A manufacturer of cheap plastic toys may find it easy to ramp up production if the price goes up. Someone who makes handcrafted gold jewelry may not be able to make extra, even if the price skyrockets.
How to Use this Knowledge
A business can use the supply curve to plan for the future. Suppose the company makes kitchen knives. If the top price for a quality kitchen knife is $25, what quantity supplied would the company be willing to make? 1,000? 500? Once the company knows, it can plan how many it will manufacture. It can also consider alternative approaches: if it can lower the cost of making the knives, perhaps the quantity supplied would change too.