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Law of Supply

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notes

Law of Supply Introduction : 

The law of supply is also a fundamental principle of economic theory like law of demand. It was introduced by Prof. Alfred Marshall in his book, ‘Principles of Economics’ which was published in 1890. The law explains the functional relationship between price and quantity supplied.

Statement of the Law :

“Other things being constant, higher the price of a commodity, more is the quantity supplied and lower the price of a commodity less is the quantity supplied” In simple words, “other factors remaining constant, a rise in price results in a rise in the quantity supplied and vice-versa. Thus, there is a direct relationship between price and quantity supplied. 

Symbolically,
Sx = f (Px)
S = Supply
x = Commodity
f = Function
P = Price of commodity

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