The document discusses supply, factors that influence supply, and supply elasticity. It defines supply as the quantity producers are willing and able to offer for sale at a given price. The quantity supplied increases with price and decreases with falling price, as depicted by a positively sloped supply curve. A supply schedule shows the quantity supplied at different prices. Elasticity of supply measures the responsiveness of quantity supplied to changes in price and other factors. Production is defined as the process of combining inputs to create outputs that are sold in the market.

1. UNIT 3
Bharti kumari

2. Supply Analysis
 The Supply of commodity means the amount of
that commodity which producers are able and
willing to offer for sale at given price.
 The higher the price, the greater will be the quantity
of a commodity that will be supplied by a producer,
and vice versa.
 The relation between price and quantity supplied is
direct and positive.

3. Factor Influencing Supply

4. The Law of Supply
 There is a direct relationship between price and
quantity supplied.
 Quantity supplied rises as price rises, other things
constant.
 Quantity supplied falls as price falls, other things
constant.

5. Supply schedule
 It is a tabulation representation of data on the
quantity supplies and the price of the good.
 Supply refers to a schedule of quantities a seller
is willing to sell per unit of time at various
prices, other things constant.

6. Price Per Slice
of Pizza ($)
Slices Supplied
Per Day (#)
.50 100
1.00 150
1.50 200
2.00 250
2.50 300
3.00 350

7. Supply curve
 When we portrait supply schedule in graphic
form it is known as supply curve.
 The supply curve is the graphic representation
of the law of supply.
 The supply curve slopes upward to the right.
 The slope tells us that the quantity supplied
varies directly – in the same direction – with
the price.

8. Supply Curve
Quantity supplied (per unit of time)
0
Price(perunit)
S
P
A
QA

9. Law Of Supply
 The law of supply is a fundamental principle of
economic theory which states that, all else equal, an
increase in price results in an increase in quantity
supplied. In other words, there is a direct relationship
between price and quantity: quantities respond in the
same direction as price changes.

11. Supply Elasticity
 Elasticity of supply measures the response of
quantity supplied to changes in any of the
factors that influence supply.
 Elasticity of supply is defined as the
percentage change in quantity supplied
divided by the percentage change in price.
 Elasticity of supply = % change in quantity
supplied/% change in price

12. Price Elasticity of Supply:
Price elasticity of supply measures
the relationship between change in
quantity supplied and a change in price.
If supply is elastic:
Producers can increase output without a rise in cost or a
time delay.
If supply is inelastic:
Firms find it hard to change production in a given time
period.

13. Production concept & Analysis
 Production is the process of combining inputs to
create output which the firm sells
in the market.
 It is not the creation of matter but it
is the creation of value.
 Production means a process by which resources are
transformed into a different more useful
commodity or service. In general, production
means transforming inputs into an output.

14.  Production is the act of creating output, a goods or
service which has value and contributes to the utility of
individuals.
 Any effort directed toward the realization of a desired
product or service is a "productive" effort and the
performance of such act is production.