Seeking to maximise profits leads each osteopath to want to sell more care at higher prices. There is a reliable and predictable positive relationship between price and quantity supplied. Formally, supply is defined as the quantity of a good or service that a population of sellers is willing and able to sell at every conceivable price. This positive relationship is shown graphically by the supply curve on the left - SS. If the price changes there is a movement along the supply curve (see Figure 7). At price P the osteopath population is prepared to sell Q treatments. When the price rises to P' the osteopath population is prepared to sell Q' treatments - this might be because more people become osteopaths when it becomes a more lucrative job.

If the level of factor costs changes then the supply curve will shift. For example nurses' wages could go up or the rent could fall. Let's look at the effects of these.

In Figure 8, SS is the initial supply curve for treatments. Imagine that nurses' wages rise, pushing up osteopaths' costs. The osteopaths react by being prepared to supply fewer treatments at each price (this may be because there are fewer osteopaths). At a price such as P' osteopaths are now only prepared to sell Q" treatments rather than Q'. The supply curve shifts inwards to S'S'.

Now imagine that rents fall. The profit of osteopaths will increase for each treatment. The osteopath population will react by being prepared to supply more treatments at each price. At the price P' osteopaths are now prepared to sell Q"' treatments rather than Q'. The supply curve shifts outwards.

Now look at these (check the status bar for information)