2. Presentation On Supply
Paras Agarwal
Pranay Reddy
Haswant Reddy
Shahid
Abhilash Manikanta
Yadav

3. Supply & Its Features
 Def. Of A Supply :  Features Of Supply :
 Supply is the quantity of a  Supply is always expressed in
commodity that the producer terms of price.
is writing to sell in the market  Supply is a flow because it is
at a given price in given measured over a period of
period of time time

4. Supply Schedule
 Individual supply schedule  Market supply schedule
 Def. It is defined as a table  Def. It is a table which shows
which shows various quantity of various quantity of commodity
commodity. which an individual that all the firms are willing to
producer offers for sale during a supply at each market price
given period of time at, different during a given period of time
prices

5. Law Of Supply & Supply Curve
 The fundamental principle of Law Of 12
Supply is that - Supply of any
commodity is directly proportional to
Price of that commodity.
10
 That means, as the price of a good
increases, suppliers will attempt to 8
maximize profits by increasing the
quantity of the product sold.
Price Of Units
6
₰ Note :
≡ Main assumption of law of supply is
cetris paribus i.e. other things 4
remaining the same.
≡ Other assumptions are
2
≡ (i) price of related goods should
remain same
≡ (ii) goal of the firm should not change,
0
(iii) input prices & taxation policies
100 200 300 400 500 600 700 800 900 1000
should remain same.
Supply Units

6. Factors Affecting The Supply
 Price of the commodity
 Price of related goods
 Goals of the firm
 Input price/ factor price/ cost of
production
 State of technology
 No. of producers
 Future expectations regarding change
in price
 Taxes & subsides
 Natural factors
 Means of transport & communication

7. Reasons For Supply Curve Moving Upwards
 Price & quantity relationship
 Entry of new firms
 Goal of earning higher profit

8. Change (Or) Shift Of The Supply Curve
ж Def. Change in the supply means change in total, shift of supply curve
takes place due to change in the factors other than the product price.
There are two types of movement.
(a) Increase (b) Decrease
When the supply of a commodity When the supply of the commodity
increases. due to favorable changes decreases due to some unfavorable
in factors other than the price of the changes in the factors other than the
product it is called increase in price of the goods the supply curve
supply. In such a case there is a shifts to the left ward
rightward shift of the supply curve
Y S2 S
Y S S1
Price
Price
P
P
S2
S
S1 S
Increases Decrease
O Q Q1 X Qty O Q Q1 X Qty

9. Movement Along The Supply Curve
ж Def. Change in quantity supplied due to change of the price in same given
supply curve of the commodity.
There are two types of movement of it.
(a) Extension (b) Contraction
refers to increase in quantity refers to decrease in quantity
supplied due to rise in the price of supplied due to rise in the price of
good. It is an upward movement on good. It is an downward movement
the same supply cure on the same supply cure
Y S
Price P3
Extension
P1
P2
S
Contraction
O Q2 Q1 Q3 X Qty

10. Reasons For Supply Curve Moving Downwards
 Obsolete technique of production
 Increase. in price of related goods
 Increase. in cost of production
 Decrease. In no of firms

11. Exceptions To Law Of Supply
 There are two exceptions to law of supply. They are,
(a) A Vertical Straight Line (b) Backward Sloping Curve
Supply Curve
This type of supply curve might occur in
It happens in the case of highly the case of Laborers in terms of no of
perishable commodity. supply for which hours worked. In this case to some
cannot he increased or decreased due to extent supply of Laborer increases with
their highly perishable nature for increase in the wages but after a certain
example- fish, milks and milk point supply of Labor starts decreasing
products, leafy vegetables etc. even if the wages are increasing
1.
Y S
S Y
Price
Wages W5
P3
W4
P2
W3
P1
W2
P
W1
S
O Q X Qty O X Laboures
L5 L1 L2 L3

12. Elasticity Of Supply & Factors Affecting It
 Def. Elasticity of supply refers to responsiveness of quantity supplied to
the change in its own price.
Es = % Change in quantity supplied
% Change in price
Factors Affecting Elasticity Of Supply :
☻ Time factor
☻ Nature of the commodity
☻ Production Capacity
☻ Future price expectation
☻ Nature of input
☻ Behaviors of cost of production
☻ Risk taking

13. Degree Of Price Elasticity Of Supply
 Price Elasticity Of Supply helps  Five Types Of P.E.S
producers to have a better
understanding of its present
 Inelastic Or Less Than Unitary
and future supply outcome
Elastic Supply
 More Than Unitary Elastic OR
 If supply is elastic, producers Elastic Supply
can increase output without a  Unitary Elastic Supply
rise in cost or a time delay
 Perfectly Elastic
 If supply is inelastic, firms
 Perfectly Inelastic
find it hard to change
production in a given time
period.

14. Perfect Inelastic [ PES = 0 ] Perfectly Elastic [ PES =  ]
Y
Y
Price S
P2 Price Es = ∞
Es = 0 P
P
S
P1
S
O Q X Qty O Q Q1 Q3 X Qty
Example : Antique Goods In Auction Hypothetical Example : Sale Of Oxygen In
Medieval Ages

15. Unitary Elastic Supply More Than Unitary Elastic Supply
[ PES = 1 ] [ PES > 1 ]
Y
X S
Price
Price P1
P
Es > 1
Es = 1
P
P1
S
O Q1 Q2 Y Qty O Q Q1 X Qty
Hypothetical Example : Wishes Granted By Hypothetical Example : Gold Ornaments
Genie To Aladdin In Arabian Nights In My On Special Occasions
Childhood

16. Less Than Unitary Elastic Supply
[ PES < 1 ]
Y S
Price
P1
P Es < 1
S
O Q Q1 X Qty
Example :

17. Time Period

18. Very Short Period Short Period
Y S
Y S
Price
Price P3
P
P1
S
P2
O Q X Qty
O X Qty
Supply = Constant, Supply Curve Is Supply Curve In This Case Will Be
Straight Line From X-Axis Upward Sloping Originating From X –
Example : All Perishable Goods Axis.
Example : Fruits, Vegetables, Bakery
Products

19. Long Period Very Long Period
(i)
Y S
Y
Price
Price ` S
S S
S
O X Qty
O X Qty
Supply Curve In This Case Will Be Upward Supply Curve In This Case Is Almost A
Sloping, Originating From Y – Axis Horizontal Straight Line Originating From
Examples : Clothes, Utensils Etc. Y – Axis.
Example : Electronic Goods, Furniture Etc.

20. Difference B/W Stock & Supply
Basic of diff. Stock Supply
1. Meaning Refers to the total amount of goods which Means quantity of commodity that are
producers & seller are ready do offer for sell at a offered for sale in the market in given
particular point of time. period of time at the given price
1. Dependence Stock Of the commodity mainly depends on Supply Of a commodity. depends mainly
a) Production of commodity . on the market price of the commodity
b) Procurement price
c) Storage & transport cost
1. Concept It has a stock concept i.e. stock refers to amount of It is a flow concept i.e. it refers to the
a commodity. at a particular point of time amount of a commodity during a period
of time.
1. Commodities In case of highly perishable commodity. stock & In case of durable commodity. supply
supply would almost he same since these items consists only a part of total stock
cannot be stoked for a long period.
1. Objective The stock of any commodity. helps in checking Enables the firm to earn sales revenues
fluctuations of market price.

21. Any Q’ns ?? Thank You !!!