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What is Supply ?|What are the types of supply schedule ?|What is Supply Curve ?|What are the types of Supply Surve ?|What are Determinants of Supply ?

               
       What is Supply ?

Supply refers to quantity of a commodity that a firm is willing and able to offer for sale at a given price during a given period of a time.

      What is  quantity supply ?

Quantity supply refers to a specific quantity that the producer is willing to sell at a specific price of the commodity. 

               What is supply schedule?

A supply schedule is a table that shows the different quantities of a commodity that can be offered for sale at different possible prices.

      What are the types of supply schedule?

There are two types of supply schedules:

i) Individual supply schedule

ii) Market supply Schedule

           Personal Supply schedule

Individual supply schedule refers to the supply schedule of an individual output in the market.





               Market Supply Schedule

Market supply schedule refers to the scheduled supply of all producers producing a particular commodity in the market.


       What is  Supply Curve?

The supply curve is meant to show the different quantities of that commodity offered for sale at different market prices.

      What are the types of Supply Surve?

i) Individual supply curve

ii) Market supply curve

                    Individual supply curve

Individual supply curve is a graphical representation of the supply schedule of an individual firm in the market.


                      Market supply curve 

Market supply curve is a graphic presentation of market supply schedule.it is supply curve of the industry as whole.it is a horizontal summation of supply curve,of all the firms in the industry.


                      Supply function

Supply function studies the functional relationship between the supply of a commodity and its determinants. This shows that the supply of a commodity mainly depends on its own price. 

             Determinants of Supply

i) Own price of the commodity: There is a direct relationship between the own price of a commodity and the quantity supplied. When the higher the price of a commodity, the higher the quantity supplied and the lower the price, the lower the quantity supplied.

ii) Price of related goods: The supply of a good also depends on the price of its related goods. For example, a firm sells tea. If the price of coffee in the market increases, then the firm will be willing to sell less quantity of tea at the current price. Only the same quantity of tea will be sold at a higher price.

iii) Number of firms in the industry: The market supply of a commodity also depends on the number of firms in the industry. If the number of firms is more, the market supply of the commodity is more and if the number of firms is less, the market supply decreases.

 iv) Objective of the firm: If the objective of the firm is to maximize profit then more of the good will be supplied only at a higher price. On the other hand, if the objective of the firm is to maximize sales, more will be supplied even at the current price.

vi) State of Technology: Improvement in the technology of production leads to reduction in the cost of production. Due to which the commodity will be supplied more at the current price.

vi) Expected future price: If the producer is expected to increase the price of the commodity in the near future, the present supply of the commodity will decrease. On the contrary, if the price is expected to fall in the near future, the present supply will increase.

vii) Government policy: Government's tax and subsidy policy also affects the market supply of a commodity. Supply may decrease due to increase in taxes while supply may increase due to increase in grants.

                       law of supply

The law of supply tells us that when the price of a commodity increases, the quantity supplied increases and when the price decreases, the quantity supplied also decreases.

             Assumptions of Law of Supply

i) There is no change in the technique of production.

ii) There is no change in the object of the firm.

iii) There is no change in the price of related goods.

iv) There is no change in the price of the commodity in the near future.

               Exceptions to the law of supply

i) Agricultural products: The law of supply does not apply to agricultural products based on natural elements. If there is a decrease in the production of wheat due to natural calamities, then the supply of wheat will not increase irrespective of its price.

ii) Goods of social prestige: The goods of social prestige are supplied in limited quantity even after getting high prices.

iii) Perishable Goods: At a point of time, sellers may be willing to sell a higher quantity of perishable goods even when their prices are low. Because the shelf life of perishable goods is very short.

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