Factors influencing the supply of a commodity, Managerial Economics

Factors influencing the supply of a commodity

a)         Own Price of the commodity

There is a direct relationship between quantity supplied and the price so that the higher the price, the more people shall bring forth to the market.  Mathematically this can be illustrated as follows:

Qs = -c + dp

Where:  Qs is the quantity supplied

-c is a constant

d is the factor by which price changes

P is the price

Thus the normal supply curve slopes upwards from left to right as follows:

1106_supply curve.png

The reason why a greater quantity is supplied at a higher price is because, as the price increases, organisations which could not produce profitably at the lower price would find it possible to do so at a higher price.  One way of looking at his is that as price goes up, less and less efficient firms are brought into the industry.

Posted Date: 11/27/2012 5:57:57 AM | Location : United States







Related Discussions:- Factors influencing the supply of a commodity, Assignment Help, Ask Question on Factors influencing the supply of a commodity, Get Answer, Expert's Help, Factors influencing the supply of a commodity Discussions

Write discussion on Factors influencing the supply of a commodity
Your posts are moderated
Related Questions
Q. Causes for diseconomies of scale? The most significant cause for diseconomies of scale is the diminishing returns to management. As the output grows beyond certain level the

Your discussion assignment this week is associated with the Pilgrim Bank case. Using the attached file, answer the following questions: A. Is there a difference in profitability ac

Industry Paper: As a partial requirement for this course, you will have to submit a paper on an Industry of your choice. This is a highly structured paper, which consists of: 1.

Q. Explain about Isoquant Map? We can label isoquants in physical units of output without any difficulty. Because every isoquant signifies a specified level of output it's poss


Electron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for their sensitive test equipment

Open Market Operations Open market operations is another traditional or quantitative weapon at the disposal of central bank to control the volume of aggregate bank credit in t

Total Cost (TC) This is the sum of fixed costs and variable costs i.e. TC = FC + VC.

Using the CPS data, set the sample to women only and regress lnwage on education & MARRIED (which is 1 if married and 0 if not) and 1-MARRIED. Give a 95 percent confidence interval

Ann owns a lawn-mowing company. She has 400 lawns she requires to cut every week. Her weekly revenue from these 400 lawns is $20,000. Given an 18-inch-deck push mower, a laborer ca