Law of Supply: Presented By: Dudhat Kenal S. STD: IMBA SEM-3
Law of Supply: Presented By: Dudhat Kenal S. STD: IMBA SEM-3
Law of Supply: Presented By: Dudhat Kenal S. STD: IMBA SEM-3
• Technology
▫ If more efficient technology is discovered
production costs will fall
▫ So suppliers will be more willing and able to
supply more of the good at each price
• Price of Relevant Resources
▫ Those resources employed in the production of a
good.
Determinants con…
4 50
3 35
2 20
1 5
10 20 30 40 50 60 70 Q
Quantity Supplied (lattes per month)
Change in Supply
• There are two type of changes in Supply. The one is
movement of supply or extension and
contraction of supply and other is shift in
supply.
• Movement of supply:
5 5
4 4
Price
3 3
2 2
1 1
0
5 20 35 50 60
Exceptions to law of supply
• There are certain commodities
the supply of which
.eg. Rare goods
such as classical paintings, old
manuscripts, old coins etc. In
some cases the supply cannot be
increased in short run like
agricultural products. Here the
supply curve will be vertical
straight line parallel to Y axis.
SHIFT IN SUPPLY CURVE
What is an increase in supply?
Or rightward shift in supply curve?
• It refers to a situation when
the producers are willing to
supply a larger quantity of
the commodity at the same
price or same quantity at
lower price.
• The reasons may be…
improvement in
technology, decrease in
input prices, fall in the
prices of related goods.
conclusion