Write short note on supply function. - Vidyadip

Question

Write short note on supply function.

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Answer

Supply function:

The supply function specifies a functional (mathematical) relationship between supply of a good and its determinants i.e. factors affecting the supply.
The supply function represents that the supply of one good is determined by many factors.

Mathematical form of the supply function:
$S_x=f\left(P_x, T, P_f, P_0, U\right)$
where $S_x=$ Supply of commodity $X$
$f=$ Functional notation
$\mathrm{P}_{\mathrm{X}}=$ Price of commodity $X$
$T=$ Level of technology
$P_F=$ Factor prices
$\mathrm{P}_{\mathrm{e}}=$ Expectations regarding future prices
$\mathrm{U}=$ Other factors

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