LAW OF SUPPLY

Mr. Rhine Stone D. Regulacion

 WHAT IS SUPPLY?
is the quantity of a good or service
that is in the market and available
for purchase at a particular price.
 SUPPLY SCHEDULE

shows the different quantities

that are offered for sale at
various prices.
HYPOTHETICAL SUPPLY OF RICE IN THE
MARKET
PRICE OF RICE (PER SACK) QUANTITY SUPPLIED

P600 300

500 250

400 200

300 150

200 100

100 50
 LAW OF SUPPLY
states as price increases, quantity
supplied also increases and as
price decreases, quantity supplied
also decreases
SUPPLY CURVE – IS A GRAPHICAL REPRESENTATION
SHOWING THE RELATIONSHIP BETWEEN PRICE AND
QUANTITIES DEMANDED PER TIME PERIOD

600

500

400

300
PRICE

200

100

0
50 100 150 200 250 300
QUANTITY SUPPLIED
 DETERMINANTS OF
SUPPLY
•Technology
•Cost of Production
•Number of Sellers
•Taxes and Subsidies
•Weather
CHANGE IN SUPPLY – PERTAINS TO THE SHIFT OF SUPPLY CURVE
BROUGHT BY THE CHANGES IN DETERMINANTS OF SUPPLY. IN
THE GRAPH, AN INCREASE IN SUPPLY SHIFTS THE SUPPLY CURVE
TO THE RIGHT WHILE A DECREASE IN SUPPLY SHIFTS THE
SUPPLY600CURVE TO THE LEFT.
500

400

300
PRICE

200

100

0
50 100 150 200 250 300
QUANTITY SUPPLIED
CHANGE IN QUANTITY SUPPLIED – SHOW THE MOVEMENTS FROM
ONE POINT TO ANOTHER POINT IN A CONSTANT SUPPLY CURVE.
CHANGE IN QUANTITY SUPPLIES IS BROUGHT ABOUT BY A
CHANGE IN PRICE.
600

500

400

300
PRICE

200

100

0
50 100 150 200 250 300
QUANTITY SUPPLIED