The document discusses the concept of supply, defining it as the amount of a commodity that sellers are able and willing to offer for sale at a given price over a period of time. It explains the law of supply, which states that supply increases with rising prices and decreases with falling prices. Additionally, it outlines the supply curve as a graphical representation of the supply schedule and how movements along and shifts of the supply curve can occur due to changes in price or other factors affecting supply.

1. SUPPLY ANALYSIS

2. What is Supply?
• Supply of a commodity is the amount of that commod
ity which the sellers (or producers) are able and willin
g to offer for sale at a particular price during a certain
period of time.
• Supply is always referred to in relation to price and ti
me.
• Supply is what the seller is able and willing to offer.

3. Law of Supply
• Under the ceteris paribus assumption, the law
of supply may be stated as follows:
• “Other things remaining unchanged, the supply
of a commodity expands (rises) with a rise in it
s price, and contracts (falls) with a fall in its pr
ice.”

4. The Supply Curve
• The supply curve is the graphical representation of
the supply schedule.
• The Supply curve slopes upwards to the right.
• Higher price means higher profit margin, given co
sts.
• So sellers increase their supply, when price is high
er.

6. Movements along supply curve:
• Affected by changes in the price of the comm
odity only, ceteris paribus.

7. Example: Movement in supply curv
e (pizza )

8. Shift in the Supply curve:
• Changes in other factors affecting supply, cause
s entire supply curve to shift upwards or downw
ards.

9. Example: Shift in supply of coffee
beans

10. Reference:
1.Text book - Economics by David Begg
2.Text book - Managerial Economics by G S Gupta
2018/4/13 Prabha Panth