The short-run supply curve – reflects the situation when one of the factors of manufacturing has a fixed nature, and the other factors are variable.


Factors that have a fixed nature are usually the principal costs of the enterprise, in particular – manufacturing equipment, while variable factors – are manufacturing resources.

In the case of a short-run supply, an enterprise will increase or decrease volumes of production primarily by increasing or decreasing production costs for manufacturing resources. Such resources may include human labor, raw materials, electricity, and fuel.

Equipment is a factor that is fixed in nature since the purchase and installation of new equipment is the most expensive investment. Changing equipment can be difficult and time-consuming. There may be no suitable analogs on the market. Also, the new equipment will have to match the size of the building where the manufacturing is located. Then, it may be necessary to provide additional training for employees to work with the new equipment.

The long-term supply curve – reflects the situation when all factors of manufacturing have a variable nature.

In this case, the enterprise may change all factors of manufacturing, including equipment, and focus on the general situation on the market (i.e., industry supply).

Any enterprise is free to choose a method of changing their amount of supply. Short-term and long-term supply are concepts that characterize the ways of increasing or decreasing the volume of production. These concepts do not have a direct impact on the time frame in which the company manages to do it.

The supply curves mathematically express the manufacturing processes at the enterprise and can be used in other graphs that reflect the influence of the market on the amount of supply.

The short-run supply curve is the marginal cost curve of any profit-maximizing company.The short-run supply curve graph.