Theory question 110
Theory of Supply(a) What is a supply schedule?
(b) Using an example, show how a market supply schedule of a product is obtained from individual supply schedules.
(c) State three examples of exceptional demand.
Show the model answer
(a) A supply schedule is a table showing the quantities of a commodity that a seller (or sellers) is willing and able to offer for sale at various prices at a given time.
(b) Add the quantities supplied by all sellers at each price. Example: at N10, A supplies 20, B 30, C 50 → market supply 100; at N20, A 30, B 40, C 60 → 130; at N30, A 40, B 50, C 70 → 160.
(c) Any three: Giffen goods; goods of ostentation (prestige/Veblen goods); goods whose price is expected to rise further; goods bought in ignorance (price taken as a sign of quality); necessities in an emergency.
Market supply is the horizontal sum of individual supplies at each price.