Supply is the quantities which suppliers (producers or sellers) are
prepared to offer for sale. [Supply is not the same thing as “existing stock”
or “amount available” ].
Supply schedule is the table showing the quantities of a product or service
supplied at various prices, over a given period of time. Supply curve shows the relationship
between market prices and the quantity supplied.
The
law of supply states that
“other things remaining the same, more of a good or service will be demanded at
higher prices than at lower prices”.
The
diagram below is the supply curve as per the market supply shown in the above
supply schedule.
There
is a direct relationship between price and supply, which is as price increases
supply increases and vice versa. Therefore the supply curve slopes
upwards from left to right. As the price increases the supplier
(producers) are ready to supply more so as to make maximize their profit.
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