Supply Schedule, Supply Curve and Supply equation

Spread the love

Supply Schedule, Supply Curve and Supply equation:

Supply Schedule: 

A supply schedule is a relation between prices and quantities for a given commodity in a given market and in a given period of time. Following is an example of a supply schedule;

Price per kg Quantity supplied
Rs. 10 50 kg
Rs. 8 40 kg
Rs. 6 30 kg
Rs. 4 20 kg
Rs. 2 10 kg

In the above schedule, we can observe that when the price was Rs 10 per kg, quantity supplied was 50 kg. When the price declined to Rs 8 and Rs 6, the quantity supplied also decreased to 40 kg and 30 kg respectively and so on. This shows that, as price decreases, quantity supplied decreases and vice versa.

Supply Curve: 

A supply curve is a graphical representation of a supply schedule. It shows the relationship between price and quantity supplied in a graphical manner. Following is an example of a supply curve:

supply-curve

The above figure shows the combinations of price and quantity supplied as presented in the schedule above. When the combination points are joint together, we get an upward sloping curve (SS) known as the supply curve.

Supply equation/ Supply function:

Supply can also be stated in the form of an equation known as supply function. It is also divided into two categories:

a)Simple supply equation:
Supply is the function of price. Supply function showing simple relation can be expressed as:
Qs =f(p)

where;
Qs = Quantity supplied
p = Price

b)Multiple supply function:
Supply is not only the function of price in a broad sense. Supply is affected by many other factors. It can be expressed as:

QsX =f(Px, Pf, Py, O, T, TS)

Where;
QsX = Quantity supplied of x commodity
Px = Price of X commodity
Pf = Prices of factor employed
O = Outside factors
T = Technology
TS = Tax and Subsidy


Spread the love
avatar
  Subscribe  
Notify of