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Before we understand the supply schedule, let us first understand the supply and schedule individually. The essential function is to produce goods and services offered for sale in the market. Market forces like demand and supply determine the price of these goods. In microeconomic theory, supply is as important as demand to study. Supply indicates the relationship between price and quantity supplied. It is from the producer’s point of view. A schedule is a tool of economic analysis. It is defined as a table showing the quantity of a dependent variable about an independent variable, such as a supply schedule.
Definition of Supply
To answer the question of supply schedule, let us briefly understand the term supply in the economic sense. Supply refers to the quantity of a commodity that a seller is willing and able to offer for sale at a particular price during a particular period. Supply is a relative term always expressed about price, time, and quantity. Supply is a flow concept, and stock is the source of supply. For example, a farmer produces 2000 kgs of rice. This is his total stock. At Rs. 30, if he offers to sell 800 kgs of rice in a given period, these 800 kgs of rice are the actual supply.
What is the Supply Schedule?
A supply schedule can be said as a table showing different quantities of any product being supplied at different prices at any given time. There is a direct relationship between price and quantity supplied, which means that as the commodity’s price becomes high, the quantity supplied of the commodity increases. Similarly, as the commodity’s price becomes low, the quantity supplied of the commodity decreases. There are two types of supply schedules:
- Individual supply schedule
- Market supply schedule
Individual supply schedule
The individual supply schedule refers to a tabular representation that shows different quantities of a commodity offered by a single or individual seller for sale at different prices during a given period.
Let us look at an individual supply schedule.
Price (in ₹ per unit) Quantity of commodity ‘X’ supplied (units)
1 10
2 20
3 30
4 40
5 50
In this supply schedule, you can see the price per unit of commodity X in rupees on the left column. On the right column, we have the quantity supplied of commodity X in units. This sees the direct relationship between price and quantity supplied; as commodity X’sX’s price increases, we can see the quantity of supply is also increasing. The seller is willing to sell only ten units when the price of commodity X is Rs. 1, but when the price rises to Rs. 5, he is willing to sell 50 units of commodity X.
Market supply schedule
The market supply schedule refers to a tabular representation that shows different quantities of a commodity offered by all the sellers in the market for sale at different prices during a given time. The market supply is obtained by horizontal or lateral summation of the quantity of a commodity supplied by all the individual sellers at different prices in a market.
As you can see clearly in this supply schedule, market supply is obtained by adding the individual supplies of seller A, seller B, and seller C at different prices in a market. Due to the direct relationship between price and quantity supplied at Rs. 1, the market supply is 60 units, and with the rise in price to Rs. 5, the market supply rises to 180 units.
Conclusion
The concept of supply schedule has a great significance in the study of economics as it helps in understanding the most important force of the market, that is, the quantity supplied of a commodity on an individual seller level and market-level with rising and falling price during a given time. The individual supply schedule helps the producer or firm gain profits by understanding the market’s demand. So make sure to read this topic thoroughly.
