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LAW OF SUPPLY by Alice Ken





LAW OF SUPPLY by
Article Posted: 01/31/2018
Article Views: 297
Articles Written: 365
Word Count: 317
Article Votes: 0
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LAW OF SUPPLY


 
Education,Law,Writing
The law of the supply is one of the fundamental concepts in the economics. Law of supply works hand in hand with the law of demand. The supply is the amount a commodity a producer is willing to supply in a market while the price is what the supplier receives after selling a commodity. Law of supply is a microeconomic law that all the other factors remaining constant, the price and measure supplied of goods are directly related to each other. This means that when the prices rise, the supplier automatically increases the supply of the goods in the market. The law of supply assumes that all variables that affect the supply remain constant. When the price of the items goes up, the supplier maximizes the profit by increasing the quantity. Law of supply mostly depicts the producer’s behavior when the prices of goods and services changes. When the price of the commodity is high the producer increase the supply to earn more profit. The tools used to summarize the relationship between the supply and the price are supply curves and supply schedules. The supply curve is a graphical representation of the quantity supplied at each price and the supply schedule is the tabulation representation of the quantity supplied at each price. The shape of supply curves varies according to the product the extension and contraction of the supply refer to the movement on the supply curve. If the price rise, the supply also rises this is known as an extension of supply and if the prices fall the supply declines, this is called contraction of supply. The increase and decrease in supply cause the supply curve to shift. The supply increase when more is usually offered in a market without any change of price. The supply decreases when the less is to be offered in a market without any change in price.

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