Meaning of supply: The supply of a commodity means the amount of that

commodity which producers are able and willingness to offer for sale at a given
prices.
Prof.Bach:- Supply is a schedule of amounts that will be offered for sale at
different prices during any time period, other factors remaining same
Determinants of supply: Price of the good- Number of Producers- Factor
prices- technology changes-Prices of other products of the producer.-Expectation of the
future
Price of the product: There is direct relationship between price !"uantity
supplied.
Number of Producers: #f more producers enter a mar$et, the supply will
increase, shifting the supply curve to the right.
Resource Prices or factor prices:
The prices that a producer must pay for its resources %inputs&
influence supply. 'esource prices affect the cost of production. (s resource
prices increase, the cost of production increases.
Technological Changes: )hanges in technology usually result in
improved productivity. #ncreased productivity can reduce the cost of production.
( decrease in the cost of production will increase supply.
Prices of other products of the firm: #f a firm produces more than one
product, a change in the price of one product can change the supply of another
product.
Producer Epectations: )hanges in producers* e+pectations about the
future can cause a change in the current supply of products.
!a" of Supply:
(ll other factors being e"ual, as the price of a good or service increases, the
"uantity of goods or services offered by suppliers increases and vice versa.
,i$e the law of demand, the law of supply demonstrates the "uantities that will be
sold at a certain price. But unli$e the law of demand, the supply relationship
shows an upward slope. This means that the higher the price, the higher the
"uantity supplied. Producers supply more at a higher price because selling a
higher "uantity at a higher price increases revenue.
!imitations of the la" of supply: -+pectations about the future price
when the price rises and the seller e+pects the future price to rise further, supply
will decline as the seller will be induced to withhold the supplies so as to sell later
and earn larger profits.
Agriculture out put: law of supply will not apply in case of agricultural
commodities as their production can not be increased at once following price
increases.- factors other than price not remaining constant.
Elasticity of supply: #t can be defined as the degree of responsiveness of
supply to a given change in price .)hange in "uantity supplied/.change in
price.
Types of elasticity of supply: Perfectly #nelastic.- where a change in
price causes no change in "uantity supplied.
-s 0 1
Perfectly elastic supply: where a small change in price leads to bigor
infinite change in supply.
#nity elastic: where a given proportionate change in price leads to
proportionate change in supply. -s 0 2
Relati$ely inelastic supply: where a change in price leads to less than
proportionate increase in supply. -s32
Price 4uantity Supplied
5 6
7 8
8 25
21 29
25 51