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Supply is considered the number of commodities that a seller or a firm offers at a specific cost during a particular period. So, it can be said that supply is a portion of the stock that is bought to the market meant for sale. 

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What is Meant by the Law of Supply?

The law of supply is considered the microeconomic law which states that when every factor remains constant and when the cost of a good or service escalates then the quantity that suppliers propose does increase too and vice versa.

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The law of supply does depict the behavior of the producers during the time when alterations in the costs of products and services happen. If the cost of a good becomes higher, the supplier intensifies the supply for earning a profit due to steeper costs.

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Some Assumptions Related to the Law of Supply

When people mention the law of supply, they never forget to mention the phrase “keeping other aspects constant.” This phrase is useful for covering the assumptions on which this law is formed:

  • Price of other products is constant.
  • There isn’t any alteration in the condition of technology.
  • Cost of the factors of production continues to remain the same.
  • The taxation policy remains unchanged.
  • Mission of the producer doesn’t change.

Some Vital Points Related to the Law of Supply

  • Law of supply states the optimistic relationship that exists between quality supplied and its price. Here, it is assumed that other factors would remain unchanged.
  • Law of supply is recognized as a qualitative statement because it shows the route of change in the quantity which is supplied. However, it doesn’t show the magnitude of changes.
  • Law of supply doesn’t form any proportional relationship that happens between the change in cost and the resulting change in quantity that is supplied.
  • Law of supply is one-sided because it does explain only the influence of change in cost on the supply and never the influence of amendment in the supply on the cost.

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Some Exceptions

The law of supply doesn’t apply when there are some forthcoming expectations for a further alteration in costs. When sellers hope for further reduction in costs in the future, then they remain prepared to sell more even at low prices. When it is a perishable good, like vegetables, fish, milk, eggs, and much more then their supply remains unaffected by their costs.

A seller can’t hold these products for a long time. Even when the matter zeroes on agricultural goods, then their supply remains dependent on natural factors more, like floods, drought, and natural calamities, and lesser on their costs. Students always come to us for getting the Law of Supply essay writing help because we proofread our work several times before handing over them to the students.

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