Other things remaining the same, the quantity supplied of a commodity is directly or positively related to its price

1. LAW OF
SUPPLY

2. Statement
Other things remaining the same, the
quantity supplied of a commodity is
directly or positively related to its
price

3. In other words
When there is a rise
in the price of a
commodity
the quantity supplied
of it in the market
increases
When there is a fall in
the price of a
commodity
its quantity supplied
decreases

4. Assumptions
• State of technology.
• Price of factors of production.
• Number of firms in the market.
• Goals of the firm.
• Seller’s expectations regarding future prices.
• Tax and subsidy policy of the products.
• Price of other goods.
Law of Supply assumes that there is no change in

5. Supply Schedule
Tabular presentation of various combinations of
price and quantity supplied

6. Supply Curve
Graphical representation of a supply schedule

7. Exceptions and Limitations
• Auction Sale
• Price expectation of seller
• Stock clearance sale
• Fear of being out of fashion
• Perishable goods

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