# Supply

Supply of a commodity refers to the various quantities of a commodity which a seller is willing and able to sell at different prices in a given market, at a point of time, other things being constant. Price of commodity is affected by the demand and the supply.

## Law of Supply

"As the price of the commodity rises, its supply increases and as the price falls, its supplies declines". Thus the quantity offered for sale is directly proportional to price i.e. larger the supply, higher the price or vice-versa as shown in the figure, other things remain same.

## Increase and Decrease in Supply

This means a change in quantity supplied without any change in price. This therefore indicates a shift in supply schedules to the right with increase in supply and to the left with decrease in supply.

## Determination of Price

Prices under perfect competition are determined by the laws of demand and supply. Prices will be fixed at a point where the supply and demand are at equilibrium. The equilibrium will change by changes in forces of demand and supply.

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