Question
Using diagram and schedule, explain the Law of Supply
✓
Answer
The Law of Supply states that other things being equal, quantity supplied increases with the increase in price and decreases with the decrease in price of a commodity. It can be explained with the help of following schedule and diagram:
The supply schedule shows the positive relationship between price and quantity supplied. This is in accordance with the Law of Supply. SS is the supply curve sloping upward. It shows a positive relationship between price and quantity supplied of a commodity. When price increases from ₹ 10 to ₹ 20, quantity supplied increases from 100 to 200 units.
| S. No. | Price (₹) | Quantity supplied (units) |
| i. | 10 | 100 |
| ii. | 20 | 200 |
| iii. | 30 | 300 |
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