Supply Schedule

Supply Schedule - that manufacturers begin at the point...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Supply Schedule: Just as goods are demanded by consumers, they are supplied by manufacturers or sellers. At any point of time quantity supplied by them is a function of the market price . Several such prices can be related to the relevant quantities supplied: this would give the supply schedule. In the given schedule, as price of the goods rises (from zero to 3) the quantity supplied also rises (from zero to 6 units). Supply Schedule q s P 0 0 2 1 4 2 6 3 (B) Supply Function: Supply is a direct function of the price and it rises or falls with the price. This is because the law of supply is based on the behavior of the cost of production . Assuming
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: that manufacturers begin at the point where cost of production is minimal any further production and supply of goods can be possible only at an increasing additional or marginal cost per unit. Hence they can afford to supply more only at a rising price . Further, logically any seller would be willing to sell more goods if the price were to rise. The quantity supplied at the given range of prices as above can be presented in the form of an algebraic function : q s = 2P With the help of the function we can find the quantity supplied at any randomly chosen prices. For instance, when P = 3, q s = 6 or when P = 2, q s = 4 etc....
View Full Document

This note was uploaded on 11/17/2011 for the course EC ec 201 taught by Professor - during the Fall '10 term at Montgomery.

Ask a homework question - tutors are online