A supply curve is also called a supply schedule. It is the amount supplied at each price. It slopes upward when price is drawn on the y axis and quantity demanded is on the x axis. A supply curve is only meaningful in an industry in which firms are price takers; that is, a competitive industry. All firms set output such that marginal revenue equals marginal cost (MR=MC). For a firm in a competitive industry the additional revenue from selling one more unit of output is simply the market price, so that P=MC. Therefore, for prices above which the firm will shut down, the competitive firm's supply curve is its MC curve. Summing up the supply curves of the industries's firms gives the total amount that all firms will supply at each price, which is the industry supply curve.

When a supply curve is drawn we are implicitly holding several other quantities constant: such as, the price of inputs, and the price of substitutes. For instance, if we draw the supply curve for concrete and the price of lime goes up then the quantity of concrete demanded at each price will fall. That is the same as saying that the supply curve for concrete will shift to the left.