Supply Analysis

Supply Analysis Assignment Help

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Supply Analysis

Supply refers to the quantity of a goods offered for sale in the market at a given price. Supply is different from stock. Stock refers to the total quantity of a commodity in existence at a given time. Supply refers to that part of the stock that is offered for sale.

Law of supply states that quantity supplied increases with a rise in price and decreases with a fall in price if other things remain constant. The main determinants of supply are the price of the product the prices of inputs and the state of technology. The supply function establishes a quantitative relationship between supply and the variables affecting it.

Extension and contraction of supply refers to changes in quantity supplied in response to changes in price of a commodity. With extension and contraction, the supply curve remains the same and all movements take place on that supply curve. Increase and decrease in supply are changes in quantity supplied due to factors other than the price of that good. Increase in supply shifts the supply curve rightwards while decrease in supply shifts it leftwards.


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