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Tutorial Topic: What is supply schedule, definition, two types: Individual & market supply schedule, and example of a supply schedule.
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Supply Schedule Definition
In economics, a Supply schedule is defined as a tabular representation of the law of supply. It represents the quantities of a product supplied by a supplier at different prices and time periods, keeping all other factors constant.
Two Types of Supply Schedule
There can be two types of supply schedules and those are explained below:
- Individual supply schedule
- Market supply schedule
Individual Supply Schedule
Individual supply schedule definition: This schedule represents the quantities of a product supplied by an individual firm or supplier at different prices during a specific period of time, assuming other factors remain unchanged.
Let us understand the individual supply schedule with the help of an example. Table 3.1 shows the supply schedule of a firm supplying commodity A:
From Table 3.1, it is clear that the firm is supplying 3,000 kg per week of commodity A at the price of 5 per kg. As the price rises from 5 to 10 per kg, the firm also increased the supply to 8,000 per kg. Therefore, the individual supply schedule shown in Table 3.1 indicates that the quantity supplied increases with a rise in price.
Market supply schedule
Market supply schedule definition: This schedule represents the quantities of a product supplied by all firms or suppliers in the market at different prices during a specific period of time, while other factors are constant.
In other words, market supply schedule can be defined as the summation of all individual supply schedules. Table 3.2 shows the market supply schedule of two firms X and Y for the commodity A:
In Table 3.2, market supply is calculated by combining the quantities supplied by firm X and Y. It also shows when the commodity is priced at 5 per kg, the market supply of commodity A is 10,000 kg per week. When the price rises to 10 per kg, the market supply also increases to 20,000 per kg. So it can be observed, that a rise in price of the commodity A increases the market supply.