Supply

    0
    75

    Supply

    • Supply is what the producers of any type of product provide from the scarce resources available to them
    • Through supply, they are aiming to meet the unlimited wants of consumers

     

    • Supply in the market is in the hands of the producers
    • This is whether we are dealing with tangible goods (mobile phones, food, clothing) or services
    • Supply seeks to satisfy consumers, but the main motives of suppliers are to do with profit
    • Economics assumes that the behaviour of a supplier is governed by the consistent need to maximise profits

     

    • The producer’s function is to combine the factors of production together in an efficient and profitable way
    • To do this, a producer needs to decide how to use the various factors of production to find the least costly and hence most profitable combination for the output they produce
    • With the example of mobile phones, when the producer combines the factors of production, this involves:
      • The assembly of components and parts
      • Employing skilled labour
      • Producing at a suitable location
      • Hiring the business skills and contracts to survive
    • Supply, therefore, can be increased by producing more or by releasing stocks of goods held in a warehouse

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here