Category: 8. Theory of Supply

Law of Supply states that, other factors being constant, quantity supplied increases with a price increase and decreases with a decrease in the price of the commodity. The degree of change in quantity supplied in response to changes in price is known as Price Elasticity of Supply. Price Elasticity of supply undertakes how the supply of…

The Law of Supply states that, with other factors being constant, the quantity supplied increases with a price increase and decreases with a decrease in the price of the commodity. The degree of change in quantity supplied in response to changes in price is known as Price Elasticity of Supply. Price Elasticity of supply undertakes how…

Contraction of Supply and Decrease in Supply often seems similar but is different from one another. Contraction of Supply is defined as a decrease in quantity the seller wishes to sell when there is a fall in own price of the commodity. Whereas, a Decrease in Supply is defined as a decrease in quantity the…

Expansion of Supply and Increase in Supply often seem similar but are different from one another. Expansion of Supply is defined as an increase in quantity the seller wishes to sell when there is a rise in own price of the commodity. Whereas, an Increase in Supply is defined as an increase in quantity the…

The terms Change in Quantity Supplied and Change in Supply are usually used interchangeably but are different from various prospects. Change in quantity supplied is defined as the change in the level of the quantity that the seller wishes to sell at a particular price, occurring due to a change in the price of the…

Supply is defined as the quantity the seller is willing to sell at a particular price, at a particular point in time. Supply undertakes various factors, like the price of the commodity, price of the substitute, future expectations, income of the consumer, cost of the inputs, technological advancements, etc. The supply curve is a graphical…

The amount of a commodity a company can provide for sale at a specific time is called supply. In this definition, four factors are highlighted, which are quantity of a commodity, price of the commodity, period, and willingness to sell. It doesn’t show how much the company sells; rather, it just shows the capacity or…

What is Law of Supply? Economists have studied the behaviour of both buyers and sellers. They have discovered the law of supply as a result of their findings. The law of supply describes the relationship between price and amount supplied when all other variables remain constant (ceteris paribus). Price is a dominant factor in the determination of the supply of…

The words stock and supply of the commodity are frequently used interchangeably. However, the two concepts are different in economics. What is Stock? Stock describes the total amount of a specific commodity that is in hand with the company at any given time. It consists of the number of goods supplied by a firm for…

What is Supply? The amount of a commodity a company is willing and able to provide for sale at a specific time is called the supply. The four factors highlighted by the definition of supply are quantity of commodity, price of the commodity, period, and willingness to sell. Characteristics of Supply The characteristics of Supply…