Presented by

Name: Logesh waran . S

Class: I MBA Content
Quality (10)
Presentation
Skills (5)
Communication
Skills (5)
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(20)

Reg.no: 1820108
 Supply refers to the quantity of a commodity , a
producer is willing and able to supply at different
prices.
 The supply side tells us the quantity of goods that
will be sold at each price.

LOGESH - EAB PRESENTATION 2

 The supply schedule shows the relationship between the
market price and the amount of the commodity that
producer will to produce and sell.
 With the help of the supply schedule, a supply curve can
be drawn.

LOGESH - EAB PRESENTATION 3

SUPPLY FUNCTION:
Sx = f(Px ,Py ,Pc , t,Ot , U )
Where,
Px = price of goods
Py = price of related goods
Pc = price of raw materials/ inputs
t = level of technology
Ot = output large
U = random variable
LOGESH - EAB PRESENTATION 4
THE LAW OF SUPPLY:
The law of supply states that a higher
price leads to a higher quantity supplied and that a
lower price leads to a lower quantity supplied.

LOGESH - EAB PRESENTATION 5

1. Production technology
2. Prices of factors
3. Prices of other products
4. Future price expectations
5. Taxes and subsidies
6. Non-economic factors

LOGESH - EAB PRESENTATION 6

 The law of supply tells us that quantity supplied will
respond to a change in price. The concept of elasticity of
supply explains the rate of change in supply as a result of
change in price. It is measured by the formula mentioned
below

LOGESH - EAB PRESENTATION 7

 There are five types of elasticity of supply.
1. Perfectly elastic supply
The coefficient of elasticity of supply is infinity. (es is ∝). For a small
change or no change in price, there will be infinite amount of supply.
2. Relatively elastic supply
The coefficient of elastic supply is greater than 1(es > 1). Quantity supplied
changes by a larger percentage than price.
3. Unitary elastic supply
The coefficient of elastic supply is equal to 1 (es = 1). A change in price will
cause a proportionate change in quantity supplied.

LOGESH - EAB PRESENTATION 8

4. Relatively inelastic supply
The coefficient of elasticity is less than one (es < 1). Quantity supplied
changes by a smaller percentage than price.
5. Perfectly inelastic supply
The coefficient of elasticity is equal to zero (es = 0). A change in price will
not bring about any change in quantity supplied.

LOGESH - EAB PRESENTATION 9

The following factors will influence the elasticity of supply
1. Changes in cost of production
2. Behaviour pattern of producers
3. Availability of facilities for expanding output.
4. Supply in the short and long period.

LOGESH - EAB PRESENTATION 10

LOGESH - EAB PRESENTATION 11