1.

Supply

2. Supply

Individuals control the factors of production – inputs, or resources,necessary to produce

goods.

Individuals supply factors of production to intermediaries or firms.

3. Supply

The analysis of the supply of produced goods has two parts:– \

An analysis of the supply of the factors of production to households and firms.– An analysis
of why firms transform those factors of production into usable goods and services.

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. Law of SupplyLaw of Supply As the price of a product rises, producers will be willing
to supply more. The height of the supply curve at any quantity shows the minimum price
necessary to induce producers to supply that next unit to market. The height of the supply
curve at any quantity also shows the opportunity cost of producing the next unit of the good.

6. The Law of Supply The law of supply is accounted for by two factors:– When prices rise,
firms substitute production of one good for another.– Assuming firms’ costs are constant, a
higher price means higher profits.

7. SAQuantity supplied (per unit of time)0Price(per unit)PAQAA Sample Supply Curve

8. Supply Curve DVDs

9. Change in quantity supplied (a movement along the curve)Change in Quantity Supplied

Price(per unit)Quantity supplied (per unit of time)S0$15A1,250 1,500B

10. Shift in SupplyPrice(perunit)Quantity supplied (per unit of time)S0Shift in Supply(a shift

of the curve)S1$15A B1,250 1,500

11. Shift Factors of Supply Other factors besides price affect howmuch will be supplied:
Prices of inputs used in the production of agood. Technology. Suppliers’ expectations.
Taxes and subsidies.
1. 2. Supply is the willingness and ability of producers to supply a particular quantity of a
commodity at a particular price over a given period of time. Here Raamlal tells his
manager about the prevailing price of Tea in the the market and accordingly the manager,
changes the supply of tea. WHAT IS SUPPLY?
2. 3. SUPPLY SCHEDULE AND CURVE Price of Tea Quantity Supplied of Tea 5 10 10
20 15 30 0 5 10 15 20 25 30 35 5 10 15 PRICE QUANTITY SUPPLIED
3. 4. LAW OF SUPPLY STATES THAT • There is a direct relationship between price and
quantity supplied of a commodity • Quantity supplied rises as price rises, other things
constant. • Quantity supplied falls as price falls, other things constant.
4. 5. WHAT IS LAW OF SUPPLY. • Law of Supply • As the price of a product rises,
producers will be willing to supply more of the Particular commodity. • According to the
scenario the Manager tends to increase the supply of Tea at higher prices and vice-versa.
Quantity supplied0 Price
5. 6. THE SUPPLY CURVE • The Supply Curve is the graphical representation of Supply
Schedule. Price of Coffee Quantity supplied of Coffee 1 2 6 9 3 12 4 15 5 18
6. 7. DETERMINANTS OF SUPPLY • Px- Price of the commodity • Pr- Price of related
goods • Pf- price of factors of production • G- Government Policy • St- State of
technology • F- Number of firms • S- Season and Weather • E- Future Expecations
7. 8. SHIFT IN SUPPLY CURVE {CHANGES IN SUPPLY} • Expansion/Contraction in
supply curve occurs due to change in its own Price others factors Remaining constant.
8. 9. Prices of Related Goods and Services Number Of Producers Expectations Of
Producers Technology And Productivity Resource Prices Supply
9. 10. SHIFT IN SUPPLY CURVE • There is a shift in Supply Curve {Rightward/Leftward
shift} when there is a change in the supply of a commodity due to other factors, Price
remaining Constant.