The Supply Curve
The way we have done the demand related concepts, in the same way, we will be discussing the supply related concepts. In this post, we will just focus on the basic concepts related to the supply curve. We will discuss the following:
- What is “Supply”?
- What is “Quantity supplied”?
- Types of supply
- What is “Supply schedule”?
- What is “Supply curve”?
Supply is the exact opposite of demand. Let’s understand this concept by breaking it into smaller basic questions.
What is Supply?
Supply refers to the quantity of a commodity that a seller is willing to sell at different prices during a given period of time.
For example, a seller is willing to supply 1000 Pepsi bottles at price of Rupees. 25
What is Quantity Supplied?
Quantity supplied refers to the amount of commodity offered for sale against specific price at a particular point of time.
Taking the same example, the quantity supplied is 1000 at the rate of rupees 25.
Types of Supply
Supply is of 2 types:
- Individual Supply: The supply of a particular commodity by an individual firm at different prices in the market is called the individual supply.
- Market Supply: The supply of a particular commodities by all the firms at different prices in the market is called the market supply. Market supply is the sum of individual supply.
What is Supply Schedule?
Supply schedule is a tabular presentation of various quantities of a commodity that are offered for sale, corresponding to different possible prices of that commodity. Supply schedule shows the positive relationship between price and quantity supplied of a commodity. So, if the price increases, the quantity supplied of a commodity will increase.
It is of 2 types:
1. Individual Supply Schedule
It means the tabular presentation of various quantities that a seller is willing to sell at different prices. As shown below:
2. Market Supply Schedule
It means the tabular presentation of various quantities that all the sellers are willing to sell at the different prices.
What is Supply Curve?
Supply curve is a graphical representation of supply schedule showing various quantities of a commodity offered for sale at the different possible prices of that commodity.
It shows a positive relationship between price of a commodity and its quantity supplied.
Supply curve is upward sloping. For a firm, a rising part of its marginal cost curve is a supply curve.
It is of 2 types:
1. Individual Supply Curve:
The graphical representation of the relationship between price and individual supply of a commodity by an individual firm. As shown below:
2. Market Supply Curve:
The graphical representation of a relationship between price and the market supply of a commodity by all the firms is called the market supply curve.
It is the horizontal summation of individual supply curve. As shown below:
Thank You for reading.
You can read the following related posts:
- What is production function?
- Terms related to production concept
- Law of diminishing returns to a factor
- Total cost, Total variable cost and Total fixed cost
- The relation between TC, TVC and TFC
- Average total cost
- The demand curve
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