Supply Function

Supply

Supply is the quantity made available for purchase in the market. Supply in economics refers to the quantity of a good being sold at a specific price for a set amount of time.

Types of Supply

• Joint supply: It speaks of the jointly produced and provided items. Some goods share a common ancestor and go through the same production process. Wheat and straw are two examples of cooperative supplies, as are wool and mutton, etc.
• Composite supply: When there are various sources of a good or service's supply, we say that the supply is made up of all of these sources. Electricity, gas, kerosene, oil, candles, etc. are all sources of light. All of these contribute to the production of light. The supply is composite whenever there are competitor or replacement sources of it.

Supply Function

The algebraic form of the demand curve is known as the supply function since it is a mathematical function that explains the quantity supplied in terms of its numerous determinants, including price. The rate of supply, which serves as the dependent variable, and its many determinants are represented mathematically by the supply function. The supply curve depicts a supply function in two dimensions, with supply depicted as a function of price (ceteris paribus).

Mathematically, Qx=f(Px,Pr,C,T,Id,Gf,Nf,Ts,etc……).
Where, Qx=Supply of a commodity X, f=Function, Px=Price of X good, Pr=Price of other good, C=Cost of production, T= Technology,Id= Infrastructural development, Gf= Goals of a firm, Nf=Natural factors, Ts=Tax and subsidy.

Types of Supply Function

Basic categories for supply function include:

Single variable supply function

Single variable supply function is the name given to the mathematical relationship between the quantities provided of a commodity X and its price. Other than price, constants in this connection include production costs, the cost of comparable commodities, and technology. In math, Qx = a + b p OR Qx = a p b further categorizing a single variable as:

• Linear supply function: The linear supply function is a straightforward equation that describes how the demand for a commodity and its price are related among its consumers. In a linear supply function, the supply curve's slope remains constant (i.e., a straight line). In mathematics, Qx = a + b p. Where b is the slope of the supply curves and an is autonomous supply. Assuming that Qx=5+5p, let's calculate the supply of a commodity X at various prices.

• Non-Linear supply function: When the slope of the supply curve varies all the way along the supply curve, a supply function is said to be non-linear or curve-linear. A power function is typically used to express a non-linear supply function. In mathematics, Qx = ap + b. Where a stands for autonomous demand and b for demand curve slope. Let's determine the demand for a commodity at different prices (where Qx=10p2)

Movement along supply curve

The state of an increase or reduction in quantity supply of a product due to a change in price, while holding all other non-price parameters constant, is referred to as movement along the supply curve. It clarifies how the price-quantity combinations shift from one supply curve point to another. In this instance, a change in price causes the producer to shift on a different point of the same supply curve, ceteris paribus. Therefore, movement along the supply curve is defined as the change in producer equilibrium points up and down on the same supply curve owing to a change in price, while keeping all non-price parameters constant.

Shift in supply curve

Change in supply brought on by numerous non-price factors like as the number of businesses, the cost of production, changes in technology, and government tax policies is referred to as a shift in the supply curve, when price remains constant. When

Reference

Koutosoyianis, A (1979), Modern Microeconomics, London Macmillan