supply law of supply determinants of supply equilibrium surplus and shortage prepared by ali siddiqi
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Prepared By Ali Siddiqi
SUPPLYSupplyLaw of SupplyDeterminants of SupplyEquilibrium Surplus and Shortage
![Page 2: Supply Law of Supply Determinants of Supply Equilibrium Surplus and Shortage Prepared By Ali Siddiqi](https://reader035.vdocuments.net/reader035/viewer/2022080916/56649ea75503460f94baa225/html5/thumbnails/2.jpg)
Prepared By Ali Siddiqi
The total amount or quantity of a good or product that producers are willing and able to sell at various prices (Schiller)
The total amount of output of goods and services in an economy (Sloman)
Supply
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Prepared By Ali Siddiqi
Different Prices=Different Demand Different Prices=Different Supply Law of Demand: As the prices increase…. Law of Supply: As the price of the product or
service increases…suppliers will supply more.
Law of Supply
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Prepared By Ali Siddiqi
Supply Schedule is a table showing the different quantities supplied at different prices
Supply Schedule
Table 2.2 : The supply of potatoes (monthly)
Price (pence per kg)
Farmer X’s supply (tonnes)
TOTAL market supply
(tonnes : 000s)
a 20 50 100
b 40 70 200
c 60 100 350
d 80 120 530
e 100 130 700
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Prepared By Ali Siddiqi
A graph showing the relationship between the price of goods and the quantity of the good supplied over a period of time
Upward sloping Positively Slopped
Supply Curve
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0 25
50
75
100
125
150
175
200
225
250
275
300
325
350
375
400
425
450
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500
525
550
575
600
625
650
675
700
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800
0
20
40
60
80
100P
rice
(pe
nce
per
kg)
Quantity (tonnes: 000s)
Supply
a
b
c
d
e
P
20 40 60 80100
Q
100200350530700
abcde
Market supply of potatoes (monthly)Market supply of potatoes (monthly)
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Prepared By Ali Siddiqi
Capacity and technology Cost of production Random Events “Shocks” Expectations of Future Prices Prices of Substitutes and Compliments
Changes in Supply
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Prepared By Ali Siddiqi
This is the point where supply equals demand.
At this point suppliers are supplying the same amount of products as demanded.
Agreement point
Equilibrium: Mr. Demand, Meet Mr. Supply
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Prepared By Ali Siddiqi
On Board
Surplus and Shortage