Question

Clarify the difference between stock and supply.

Answer 1

• In routine terms, the concepts of stock and supply are considered and / used as one and the same by people but, technically the two are different.
• Stock is the sum total of the available amount of a good whereas, supply is the stock which traders are able and willing to sell at a prevailing price at a particular point of time.
• Whenever the trader is unable and not willing to sell the entire available stock at a given price and a point of time, supply will not be considered equal to the stock.

Example:

• From an available stock of 500 packets, if the trader is able and willing to sell 300 packets then the supply of oil is 300 packets whereas the stock is 500 packets.
• Hence the available stock which determines the ability to sell is called stock. On the other hand, the ability and willingness to sell at a given price at a particular point of time is the supply.
• Hence, stock is the total amount of a product which is available for sale whereas supply is less than stock.
• Stock consists of current production as well as the unsold stocks from previous lot ot production.
• Thus, we can say that stock is different from production and supply.