Chapter 7.3, Problem 1R

To determine

To evaluate the significance of law of supply, quantity supplied, supply schedule, supply curve, technology and law of diminishing returns.

Explanation of Solution

Supply law is the microeconomic rule which specifies that the quantity of products or services that suppliers sell will increase as the value of a commodity or service increases, all other variables being same and vice versa. Supply law states manufacturers should aim to maximize their profits through the amount sold for sale, as the cost of an item increases.

In economics, the quantity provided explains the quantity of goods or services sold at a specified market value. The way supply fluctuations are called supply price elasticity in response to shifts in demand. The sum given depends on the level of the price, and either a regulatory body may set the price by using price floors or ceilings or by normal market forces.

A supply schedule is a chart displaying the connection between the price of a product and the amount produced. The supply curve is a graphical depiction of the schedule of supply indicating the relation between a product's price and the amount supplied.

The curve of supply is a graphical description of the relationship linking the price of a product or service and the amount delivered over a particular period. In a traditional example the price will be shown on the vertical axis, while the quantity given will appear on the horizontal axis.

A unit of science that works with the creation and use of technological means and their interdependence with culture, society and the world, drawing upon subjects such as applied arts,engineering, science and computational chemistry is called technology.

The law of decreasing marginal returns is a principle in economics that assumes that adding an additional production factor would eventually result in smaller increases in output after some optimum level of efficiency is reached.

Economics Concept Introduction

Introduction: Supply is a basic economic concept, representing the total amount available to consumers for a specific product or service. Supply can refer to the quantity accessible at a particular price, or the amount available across a variety of prices, if shown on a graph.