1. Supply
•Supply is the quantity of a commodity
offered for sale in the market at a particular
price.
2. Price (Rs) Quantity
Supplied (Kg)
5 40
10 60
15 80
20 100
25 120
Supply Schedule
Supply Curve
Supply schedule is a table that shows various
quantities of a good or service that sellers are
willing and able to offer for sale at various
possible prices during some specified period.
The supply curve is a graph showing various
quantities of a good or service that sellers are
willing and able to offer for sale at various
possible prices. The supply curve slopes
upwards because of the direct relationship
between price and quantity supplied.
3. • Why there is a direct relationship between price
and quantity supplied?
•The main reason is that higher prices serve as an
incentive for sellers to offer greater quantity for
sale.
• The sellers or producers can be induced to
produce and offer a greater quantity for sale by
higher prices.
•It is assumed that sellers or producers aim to
maximise profit from the production and sale of
the commodity.
4. • The higher the prices of the commodity, other things being equal,
the greater the potential gain producers can expect from
producing and supplying it in the market. Moreover, increases in
price may invite new suppliers in the market.
• Assumptions of the Law of Supply: There are various non-
price factors that affect supply. Non price factors like state of
technology, prices of factors of production, prices of other
products, number of producers in the market etc are assumed to
remain constant.
5. Law of Supply
• The functional relationship between price and quantity supplied is called
the law of supply. According to the law of supply, as the price of the
commodity falls, the quantity supplied decreases or alternatively, as the price
of the commodity rises the quantity supplied increases, other things being
equal. Therefore, there is a direct relationship between of the commodity and
quantity supplied.
• The law of supply can be illustrated through a supply schedule and supply
curve.
