Explain Low Of Supply IN Details?

1. LAW OF SUPPLY

• Statement:- The law of supply states that "other things remaining constant, more of a commodity is supplied at a higher price and less of commodity is supplied at a lower price"

• The law of supply states the functional relationship between the price of product and its supply
• The relationship between supply of the product and its price is direct in future. Means if the price increases the supply increase and if the price decrease the supply will decrease.
• The elements of "the other thing remain same" means that the determinate s other then price of the product will remain same (Unchanged)

SUPPLY SCHEDULE

• Meaning:The supply schedule is tabular representation of different quantities supplied at different price.
• By putting the quantity supplied at different price levels of commodity, We get supply schedule.

  

  Example Supply Schedule

SUPPLY CURVE

• Meaning: When supply schedule represents diagrammatically. it is shows as supply curve.
• Shows: The supply curve shows various attractive price-quantity combinations. It shows the quantities of a product which the supplied would supply at different prices under the assumptions of law of supply.
• On supply curve the OX axis shows the quantity of the product supplied and OY  axis shows the price of the product.
• The supply price relationship is shows by ss' curve knows as supply curve.

  

  Example Of Supply Curve

CHARACTERISTICS OF LAW OF SUPPLY

• Relationship: There is direct relationship between the price of the product and its quantity supplied means, with increases in price supply increases and with supply decrease in price, supply decreases.
• Variable: Price is independent variable, while supply is dependent variable.
• Causative Factor: Price is causative factor means it's the price with affect supply, supply is not affecting price.
• Other Factors: The law of supply assumes that other factors except price remain constant.

EXCEPTIONS TO THE LAW OF SUPPLY

1. Expectations about future changes in prices:- 
1. If the sellers anticipate that the price of a particular commodity is going to fall in future, then in order to avoid future losses they would try to sell as much as possible even the prices are falling. Means decrease in price does not lead to decrease in supply.
2. If the  seller expects the prices are going to rise in future, then to take advantage of future price rise, they would restrict their sates even if the prices are rising
2. Rare articles:-
1. The law of supply does not apply in case of rare article coins, stamps, historical documents, autographs of historical leaders etc.
2. The supply of rare articles is fixed so even if the prices are increasing, the supply of such articles will not increase.
3. Commodities whose supply is fixed in short run (Period):-
1. There are certain a commodity whose supply is fixed is short is short run. Their supply cannot be increased or decreases in short run.
2. Examples: Vegetables, fruits, milk, flowers etc.
3. Even through increase or decrease in price of such commodities will not having much effect on supply of such commodities.
4. Supply of labor:-
1. Law of supply does not apply to the factor of production like labor.
2. Increase in the price of labor means wage rates results is increases in supply of labor because workers will work for more hours to get extra money. But after a certain point they would prefer leisure so, increase in price of labor leads to increase in supply of labor up to certain point. Beyond which the supply of labor does not increase.

ASSUMPTIONS OF THE LAW OF SUPPLY

1. There should not be sudden increase or decrease in the production of the commodity either because of nature of other factors.
2. There should not be any change in the scale of production during the given time,
3. There should not be any change in the technique of production.
4. There should not be any change in cost of production due to change in factor prices.
5.