IB International Economics HL Practice Exam 2025 – Complete Study Guide

Supply in economics is defined as the quantity of a good or service that producers are willing and able to sell at different price levels. This definition emphasizes two critical components: the willingness of producers to sell and their capacity to do so. It recognizes that the amount of goods available in the market is not static but varies based on the prevailing prices; as prices increase, producers are generally incentivized to supply more of the good to the market to maximize their profits, reflecting the law of supply.

The understanding of supply as an essential part of market dynamics connects closely with demand, as the interaction between supply and demand determines the market equilibrium price and quantity. The option that describes supply in relation to consumer behavior is incorrect because it focuses solely on consumer demand rather than the producer's perspective. Similarly, defining supply as a fixed amount available or as the total demand for a good does not capture the essence of supply, which is inherently linked to producers' decisions based on various price levels. Thus, option B is the most comprehensive and accurate representation of supply in economic terms.