Like the market demand curve, the market supply curve is a horizontal summation of the individual supply curves. Thus the market supply curve is derived by summing up supplies of individual producers at all the various per unit prices. If there are only three producers in the market with different cost of production and different individual supply offers at various prices, we can sum up their individual supply schedules to get the market supply schedule. This can be done as below:
Individual and Market Supply Schedules
| Supplies A |
Supplier B | Supplier C | Market Supply A + B + C | ||||
| Price | Quantity | Quantity | Quantity | Price | Quantity | ||
| 1 2 3 4 5 |
Nil Nil 1 2 3 |
Nil 1 2 3 4 |
1 2 3 4 5 |
1 2 3 4 5 |
1 3 6 9 12 |
||
Thus, by summing up all individual supplies at various at various prices we get the market supply schedule. Thus market supply curve is then drawn on the basis of this market supply schedule.
