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    Xi-J Group 5the Law of Supply

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    Aafreen Kohar
    The document discusses the law of supply, which states that, all else being equal, the quantity supplied of a good rises as the price of the good increases. It provides examples of how quantity supplied changes at different price levels and outlines the assumptions of the law of supply, including that prices of related goods, costs of production, technology, government policy, and business goals remain unchanged. Graphs of a supply schedule and supply curve are presented to illustrate the direct relationship between price and quantity supplied.

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    Xi-J Group 5the Law of Supply

    Uploaded by

    Aafreen Kohar
    13 views12 pages
    The document discusses the law of supply, which states that, all else being equal, the quantity supplied of a good rises as the price of the good increases. It provides examples of how quantity supplied changes at different price levels and outlines the assumptions of the law of supply, including that prices of related goods, costs of production, technology, government policy, and business goals remain unchanged. Graphs of a supply schedule and supply curve are presented to illustrate the direct relationship between price and quantity supplied.

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    XI-J GROUP 5THE LAW OF SUPPLY

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    The document discusses the law of supply, which states that, all else being equal, the quantity supplied of a good rises as the price of the good increases. It provides examples of how quantity supplied changes at different price levels and outlines the assumptions of the law of supply, including that prices of related goods, costs of production, technology, government policy, and business goals remain unchanged. Graphs of a supply schedule and supply curve are presented to illustrate the direct relationship between price and quantity supplied.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    13 views12 pages

    Xi-J Group 5the Law of Supply

    Uploaded by

    Aafreen Kohar
    The document discusses the law of supply, which states that, all else being equal, the quantity supplied of a good rises as the price of the good increases. It provides examples of how quantity supplied changes at different price levels and outlines the assumptions of the law of supply, including that prices of related goods, costs of production, technology, government policy, and business goals remain unchanged. Graphs of a supply schedule and supply curve are presented to illustrate the direct relationship between price and quantity supplied.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12

    THE LAW OF

    SUPPLY
    DONE BY LEARNING STATION 1
    PREVIEW QUESTION

    DEFINE THE TERM SUPPLY


    THE LAW OF SUPPLY
    According to the law of supply, other
    things remaining the same, quantity
    supplied of a commodity is directly
    related to the price of the
    commodity.
    SYMBOLICALLY, THE LAW OF SUPPLY IS REPRESENTED AS :-

    Sx = f (Px),
    Ceteris paribus
    For example:-
    ❏Suppose a firm supplies 100 units of candies at
    price ₹10 per unit.
    ❏When its price rises to ₹15 per unit the firm
    supplies 150 units of the candies.
    ❏When its price falls to ₹5 per unit the firm
    supplies 50 units of candies.
    Law of supply assumptions

    The law of supply is based on the assumption that all factors , other than the price of
    the commodity, that affect the supply remain the same. There are 5 assumptions.

    1- Prices of the related goods should remain unchanged.

    2- Prices of factors of production ( i.e prices of inputs) should remain unchanged.

    3-Level of technology should remain unchanged.

    4-Government policy regarding taxation should remain unchanged.

    5-Goals of the firm should remain unchanged.


    THE SUPPLY SCHEDULE
    Supply schedule is a tabular statement that gives the law of supply, ie it gives
    the different quantity supplied of a commodity at different prices per unit of
    time. A hypothetical supply schedule of wheat is given below.
    The supply schedule
    obeys the law of
    PRICE QUANTITY SUPPLIED Supply as price
    (Rs per kg) (kg per month)
    of wheat rises,its
    1 5 Supply also rises.
    2 10
    3 15
    Supply Curve
    The Supply shows the relationship between quantity supplied of a commodity to its price
    graphically. The curve shows positive or the direct relationship between the price and
    quantity supplied of the commodity. With the

    Rise in the price, the curve rises upward from the left to

    The right as show in the figure


    THROW BALL!
    BALL 1: What is constant in the law of supply?
    Price of related goods State of technology

    Cost of Production All of the above

    BALL 2: When supply curve is upward sloping, its slope

    Positive Negative

    First Positive then Negative Zero


    HINTS
    Word search ! 1)The quantity of a commodity that a
    firm is willing and able to offer for
    sale at a given price during a given
    period of time.
    2)A tabular representation of the
    various quantities of commodities that
    are supplied by a supplier at different
    price levels over a period of time.
    3)Graphic representation of the
    relationship between product price and
    quantity of product that a seller is
    willing and able to supply.
    4)A basic good used in commerce that
    is interchangeable with other goods of
    the same type.
    5)The _______.of a commodity is one
    of the major factors that decide
    growth and expansion.
    6)Avery short period in which the
    supply of a commodity is fixed.
    7)The number of goods or services
    that suppliers will produce and sell at
    a given market price.
    Answers!!

    1) Supply
    2) Supply schedule
    3) Supply curve
    4) Commodity
    5) Price
    6) Market period
    7) Quantity

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