Supply and stocks are the terms used in the context of microeconomics and many people get confused and consider it as one and the same thing, however, both supply and stock are different from each other, let’s look at the difference between supply and stock-
- While supply refers to the quantity which the seller is prepared to sell in the market at given price at any point of time while stock refers to total available quantity with the seller at any given point of time.
- An example of stock will suppose as a human we have 24 hours which is fixed and it can be considered as stock and out of those 24 hours an individual is willing to supply 4 hours at $20 for a particular task and at $25 an individual is willing to supply 6 hours for a particular task. Hence supply keeps fluctuating depending on the price while stock is fixed.
- Supply can be increased and decreased depending on the price prevailing in the market while stock at a particular point of time is fixed and it cannot be increased or decreased, in simple words supply is dependent on the price while the stock is not dependent on the price.
- Supply can be equal to or less than stock but it cannot be greater than stock as in the above example no matter what price is the market willing to pay you cannot increase the working hours beyond the 24 hours stock.
- Another example of stock and supply will suppose a television manufacturer has 20000 television stock, out of which the manufacturer supplies only 2000 television at prevailing market price. Hence remaining 18000 units will be called stock and 2000 units will be called as supply.
As one can see from the above that supply and stock are very important terms when it comes to market and seller and it is the seller who decides whether to supply full stock at current market price or supply partial stock at current market price.