EEFA - SUPPLY FUNCTION - FINAL YEAR CS/IT - SRI SAIRAM INSTITUTE OF TECHNOLOGY - DR,K,BARANIDHARAN

1. Dr.K.Baranidharan
Present by…

2. Engineering
Economics &
Financial
Accountingment
Ee&fa
218 August 2013

3. SUPPLY
FUNCTIONS

4. Supply function
represents the quantity if
the commodity that would
be supplied at a
price, levels of
technology, input prices
and all other factors.
Sri Sairam Institute of Technology 415.07.2013

5.  When we express mathematically
the relation between supply
(dependent variable) and its
determinants (independent
variable), the functional
representation is termed supply
functions
 Thus supply of a product X (Sx) is
a function of:
Sri Sairam Institute of Technology 515.07.2013

6.  i) price of the product (Px)
 Ii)cost of production (wages, rent, interest,
and price of raw materials) (C)
 Iii) state of Technology (T)
 Iv) Government policy regarding taxes and
subsidies (G)
 V) Other factors like number of firms.
 We can write this relationship in the form
of a supply functions as:
Sri Sairam Institute of Technology 615.07.2013

7.  A firm supply function (Sx) for a good X
can be simplified by holding constant the
values of all variables other than the price
of the good, as follows:
S = f(P)
A linear supply function is written
in the form
Qs = c + d P
Sri Sairam Institute of Technology 715.07.2013

8. Dr.K.Baranidharan
THANK YOU