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PRINCIPLES OF ECONOMICS

SUPPLY CONCEPTS

A. Basic Concepts in Supply

Supply- refers to the behavior of suppliers or producers on their willingness and ability to make
products available at given prices

Supply Schedule-tabular presentation of prices and their corresponding quantities supplied

Supply Curve- graphical depiction

Law of Supply- “when prices of commodities tend to increase, the quantity being supplied by
producers also tend to increase, while the opposite holds true, such that when prices of
commodities tends to decrease, the corresponding quantities being supplied also ted to
decrease”

B. EXERCISES IN SUPPLY
Consider the following table:
Price (x) Quantity Supplied (y)
7 500
9 600

Requirements:
1. Plot the supply curve for the schedule
2. Determine the equation of supply
3. Determine the slope
4. Interpret the slope
5. Answer the questions that follow
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PRINCIPLES OF ECONOMICS

C. LEARNING ASSESMENT
1. Given the supply schedule:
Price (x) Quantity Supplied (y)
8 600
10 700
a. Plot the supply schedule on a graph
b. Determine the equation of quantity supplied using:
A.1. the Algebraic Approach

Try checking. Fil up the table.

Price (x) Qs= Computed Qs Qs
8 600
10 700
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PRINCIPLES OF ECONOMICS

A.2. the Least Square Method

Price (x) Qs(y) X2 (x)(y)
7
9
€x= €y- €x2= €xy=
N= Q=

c. Determine the Slope

d. Interpret the Slope

e. answer the ff questions:

e.1. what price will discourage producers to supply any product?

e.2. if the price increases to P12, what would be the quantity supplied by producers?

e.3 if the quantity supplied at a time period is only 420 units, what should be the expected price
of the commodity during this time?

e.4. if the price is expected to increase by P5.50, what would be the expected impact to the
quantity supplied of the product?

e.5. suppose the quantity supplied decreased by 85 units, what should be the corresponding
change in the price