THE SUPPLY SCHEDULE

SUPPLY SCHEDULE
The Supply side of a market tends to
link the price of a good on which
seller is willing to sell his products.
The Supply schedule for a commodity
shows the relationship between its
market price and the amount of that
commodity that producers are willing
to produce and sell, if other things
are held constant.
Lets again take the example of
2
market for cornflakes.

THE SUPPLY CURVE

FORCES BEHIND THE

SUPPLY CURVE
There are several forces affecting
supply: Cost of Production
Prices of the Inputs
Technological Advancements
Prices of the Related Goods
Government Policies
Special
Influences
like
weather,
innovations, natural catastrophes, etc.5

FORCES BEHIND THE

SUPPLY CURVE - Cost of

Production
When production cost for a good is
relatively lower than its market price,
it is profitable for producers.
When production costs are high
relative to price, firms produce little,
switch to the production of other
products, or simply go out of business
6

HOW PRODUCTION COSTS

ARE DETERMINED?
What are usual inputs in producing a
product?
Production
costs
are
primarily
determined by
Prices of inputs
Technological Advances
How prices of inputs affect production
costs?
How
technological
advances
affect
production cost?

Hourly Minimum Wages in

Different Countries

FORCES BEHIND THE SUPPLY

CURVE Prices of Related
Goods
Supply is also influenced by the
price of related goods.
Ex: Prices of wheat and rice,
prices of petrol and diesel, etc
Supply of CNG due to rising
prices of petroleum goods.