Supply

Author Topic: Supply  (Read 135 times)

Offline Md. Alamgir Hossan

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Supply
« on: April 03, 2017, 05:07:40 PM »
In a specific period, the different producer are willing to present different amount of product with different price the represented amount of product is called supply.

Example
Company ABC is a leading producer of cereals, including wheat, rice, oats, and barley. Over the last year, the company focuses mainly on the production of rice and oats because their price is high, therefore increasing the profitability of the company. What should the company do if the price of wheat increases?
Wheat is a complementary product to rice and oats. Therefore, if the price of wheat increases, the quantity supplied of other cereals will most likely decrease, because the producers like company ABC will use their production factors for the production of wheat, seeking profit maximization.