The law of supply

The quantity of a commodity which the sellers offer for sale varies directly with its price.  When the price of a commodity rises in the market, the sellers are willing to sell larger quantities of that commodity and so the supply of that commodity expands. On the other hand when the price of that commodity falls in the market, the sellers offer only lesser quantities and so the supply falls.  This tendency is known as the law of supply.  The law of supply can be stated as follows:  Other things being equal, when the price of a commodity raises, its supply rises, and as the price falls, the supply also falls.
The law of supply is valid only under the following assumptions ( Determinants of supply)

1.      The number of firms producing a particular commodity remains constant.

2.     The level of technology remains the same.

3.     The supply doesn’t depend on the price of related commodities.

4.     The seller doesn’t expect any changes in the price of the commodity he sells.

5.     Geographical factors remain constant.

6.     No labour unrest is expected.

7.     No change in government policy

8.     No change in transport and communication.

The law of supply can be explained with the help of a schedule.

Market demand schedule

Price of onion per Kg in Rs	Number of Kilos supplied
1	20
2	40
3	60
4	80
5	100

When the price of onion per kg is Rs 1, the quantity supplied is 20 kgs,

When the price rises to Rs 2 per kg, the quantity supplied is 40 kgs, when the price rises to Rs 3 per kg, the quantity supplied is 60 kgs and so on.

The above schedule can be shown in a diagram.

In the above diagram along the ox axis, quantity supplied is measured and along OY axis, price is measured.  When the price of Onion is Rs 1 per kg, the quantity supplied is 20 kgs, when the price rises to Rs 2 per kg, the quantity supplied is 40 kgs, when we plot all the points and join the points we get SS the supply curve, which slopes upwards from left to right indicating the direct relationship between price and the quantity supplied.