A Detailed study about the law of Supply and its Elasticity and a case study for the same Presented BY : Saikat Ghosh and group in NDIM Delhi

1. The Law Of Supply
Presented By:
Raj Kumar Gautam(309)
Ritu Agarwal(311)
Ravinder(306)
Rohit Thakur(308)
Revti Ojha(307)
Saikat Ghosh(310)
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2. What is Supply
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In the goods market, supply is the amount of a product
per unit of time that producers are willing to sell at various
given prices when all other factors are held constant.
What is Stock
The goods or merchandise kept on the premises of a shop or
warehouse and available for sale or distribution.

3. Element of Supply
• Quantity of commodity willing to Supply
• Price of the Commodity
• Time during which it is Offered for Sale
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4. The Law Of Supply
Affects
 Quantity supplied rises as
price rises, other things
constant.
• Quantity supplied falls as
price falls, other things
constant.
Assumptions
• No change in price of related
goods
• No change in technology
• No change in govt. policy
• No change in goal of firm
• No change in number of firms
• No change in price of factors
of production
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There is a direct relationship between price and quantity supplied.

5. SUPPLY SCHEDULE
A tabular statement showing various
quantities of a commodity being
supplied at various levels of price,
during a given period of time.
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6. TYPES OF SUPPLY SCHEDULE
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 Individual Supply Schedule
PRICE PIZZA HUT DOMINOS
250 1 REGULAR
PIZZA
1 REGULAR
PIZZA
500 2 REGULAR
PIZZA
1 LARGE PIZZA

7. Individual Supply Curve
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8. Supply Schedule
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Tabular presentation of law of supply is supply schedule
Prices (in Rs) Quantity supplied (in
millions)
5 40
10 80
15 120
20 160
25 200

9. Market supply schedule
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Market schedule is the tabular presentation of aggregate quantity supplied by the
producers in the market.
Price in $ Qnty. Supply by 1 Qnty. Supply by 2 Market Supply
$1 10 10 20
$3 15 15 30
1 2 Market Supply

10. Market supply curve
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Market supply curve is the aggregate of both the firms. It shows the
quantity supplied by the producers at a particular price at a given
period of time.

11. Change in Supply Curve
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A change in supply curve
occurs when a change in
quantity supplied is
caused only by a change
in price, and vice versa.

12. Shift in Supply Curve
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The supply curve implies
that the original supply
curve has changed,
meaning that the quantity
supplied is effected by a
factor other than price.

13. What Is Equilibrium
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 Price-quantity pair
 Quantity
demanded=Quantity
supplied
 Represented by intersection
of demand and supply
curves
 Market Equilibrium-Price is
such that quantity demanded
is correctly balanced by the
quantity that firm wishes to
supply

14. Change In Equilibrium
1) Due to change in price
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15. 2) Demand Is Perfectly Elastic
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3)Demand is perfectly inelastic

17. Case Study
• Nestlé has found itself in hot water in India after the local food safety
regulators said the company’s instant noodles contained unsafe levels of
lead and traces of monosodium glutamate (MSG).
• The first sign of trouble emerged on 30 April when the local food safety
regulator in Lucknow, the capital of the most populous state of Uttar
Pradesh, demanded the company recall a batch of Maggi noodles.
• However, a disaster was brewing. Alarmed by the public anger, several
states ordered tests and started issuing bans on the sale of Maggi noodles.
It had became a full-blown crisis by the first week of June.
• The Sale of Maggi came to a stagnation and the Supply of Maggi was Zero
• After its meeting with the national food safety regulators, Nestlé said it
was withdrawing Maggi noodles from stores “despite the product being
safe”.
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• Nearly a year after the ban, Maggi noodles are back on shelves in India,
after their noodles were announced safe
• The Supply of Maggi noodles was again started in India

19. What was the affect on the Supply
of Maggi?
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20. • Irrespective of the Price of Maggi remaining constant
the supply of Maggi Diminished and it became Zero
Initially due to the other factors affecting Supply
• But in the long run when Maggi reestablished their
market the supply of Maggi increased again
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