Q.Write a short note on: The law of supply

A demand schedule is a table showing the various quantities of a good that would be demanded at various prices, other things being equal; it can relate to a single consumer (individual demand schedule) or to all consumers in the market (market demand schedule), and it normally shows quantity rising as price falls.

Meaning

A demand schedule is a tabular statement showing how much of a commodity consumers are willing to buy at each of a series of prices in a given period, assuming other factors remain unchanged.

• An individual demand schedule shows the quantities demanded by one consumer at different prices.
• A market demand schedule shows the total quantities demanded by all consumers in the market at different prices. …

The Giffen paradox is an exception to the law of demand in which the demand for a strongly inferior good (a Giffen good) rises when its price rises and falls when its price falls — contrary to the usual inverse price-quantity relationship.

Meaning

The Giffen paradox is named after Sir Robert Giffen, who observed it among very poor English workers in the case of a basic inferior food (such as cheap bread). He found that:

• when the price of the inferior staple rose, poor consumers bought more of it, and
• when its price fell, they bought less of it. …

The law of supply states that, other things being equal, the quantity supplied of a good varies directly (positively) with its price — more is supplied at a higher price and less at a lower price, so the supply curve slopes upward.

Meaning

The law of supply states that, other things remaining constant (ceteris paribus), the quantity supplied of a commodity is directly (positively) related to its price:

• when the price rises, producers supply more, and
• when the price falls, producers supply less.

Reason and shape …