When does supply curve slope upward?


 The positively sloping supply curve is based upon two important assumptions. Firstly producers or sellers aim to maximize profits from production and sale of a commodity.

Secondly, as output of a commodity is expanded the additional cost of producing an extra unit gees up due to diminishing returns to variable factors.

As seen above, the quantity supplied of a commodity occurs in response to the change in its price. At a higher price more quantity of it is supplied and vice-versa.
Graphically:-


For above all these reasons the slope of the supply curve is positive. In figure, SS’ serve denotes the supply curve, which shows the positive relationship between price and quantity. For this reason, the slope of the supply curve is upward and positive. 

No comments

Dear Members, Thanks for Your Comments. We must be reply your comment answer as soon as possible. Please Stay with us.....

Theme images by ideabug. Powered by Blogger.