Explain law of supply.
Law of supply: According to the law of supply
other things being equal when the price of commodity roses, the quantity supply
of it in the market increase and when the price of the commodity falls its
quantity supply of it in the market decreases.
Thus the
law of supply shows the direct relationship between price of a commodity and
its quantity supply, other things remaining the same.
According
to S.E.Thomas “A rise in price fends to increase supply and fall in price
fends to reduce it.”
For
instances, if the price of rice increases sellers will supply on rice. On the
other hand, if the price of rice falls, sellers will offer lower quantity of
rice for sell. The law of supply can illustrated through a supply schedule and
through a supply curve.
Supply Schedule: A detail account of the supply of
any commodity at a given time at different price as known as the supply
schedule. It shows the following table:-
It is
clear from the supply schedule that when price is 10 tk quantity supplied 500
units. When the price is 20 tk, the quantity supplied 1000 units and when the
price is 30 tk at that time quantity supplied 1500 units. This tendency of the
producer to supply more unites at a higher price. This is nature of law of
supply.
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