What refers to the total quantity of commodity offered for sale by all producers?

Supply Schedule Definition

The supply schedule is a tabular format that lists the change in the number of goods or services offered for sale by the producers or suppliers at varying price levels during a given period. This schedule and the supply curve help to explain the law of supply.

It depicts how the supply changes in the market when the price changes. Higher prices give the producers or firms a greater incentive to produce and sell more. So it shows the supplier’s or seller’s desire to make more profit. Economists, governments, policymakers, and consumers use this schedule to understand producers and market behavior.

• In microeconomics, a supply schedule refers to a table or spreadsheet that lists the changes in the number of goods or services the producers are willing to offer with the change in their price during a given period.
• The two significant components of this tabular format are the price and quantity of a given commodity. Also, there are two kinds of these schedules – individual and market.
• It works on the principles of the law of supply and helps form a supply curve. It indicates a direct relationship between a commodity’s price and the quantity supplied.
• Other factors such as the price of related commodities, technology, government intervention, price of production factors, and suppliers’ intention also influence the supply of goods or services.

Supply Schedule Explained

You are free to use this image on your website, templates, etc., Please provide us with an attribution linkArticle Link to be Hyperlinked
For eg:
Source: Supply Schedule (wallstreetmojo.com)

The supply schedule is an easy-to-read tabular depiction of the correlation between the price of a particular commodity and the quantity supplied by the sellers, producers, or suppliers. It functions on the law of supply which says that as the price of goods falls, the producers tend to show less interest in its supply. And as the price of a commodity upsurge, the producers respond positively by increasing the supply. Thus, the supply of any commodity is directly related to the change in price, provided that the other supply curve shifters remain constant.

The demand and supply schedules are the key components of the law of demand and supply. Economist Dr. Alfred Marshall propounded the law of supply in his famous book ‘Principles Of Economics. According to him, “Other things being constant, the higher the price of the commodity, greater is the quantity supplied and lower the price of the commodity, smaller the quantity supplied.”

The supply is not the same concept as the stock of something. A stock of commodity X refers to the total quantity of commodity X in existence at a period. In contrast, the supply of commodity X refers to the amount offered for sale, in the market, over a period. Stock is the potential supply.

The schedule facilitates the plotting of a supply curve where the vertical y-axis depicts the price of goods, and the quantity supplied is shown on the horizontal x-axis. Thus, the independent variable is price, and the dependent variable is the quantity supplied. Also, an increase in the demand for goods or services results in its price rise, ultimately leading to an upsurge in its supply and vice versa.

Factors Affecting The Supply Schedule

However, other than the price of a commodity, there are various other determinants of supply, such as the price of substitute goods, price of complementary goods, level of competition, suppliers’ objectives, natural events, government policies, regulatory and tax environment, price of production factors, and technology. These factors are equally responsible for the shift in the supply curve to the left or right. As a result, the elasticity of supply depends on the level or degree of price increase or decrease. 

Types

Individual supply is always less than market supply. Individual and market schedules and curves can explain the law of supply.

#1 – Individual Supply Schedule

The various quantity of a commodity supplied by a particular single seller or producer for sale at different prices during a given period is individual supply. The schedule of supply is a table that represents it. For instance,

The supply curve often represents the above schedule. In the law of supply, the supply curve moves upward from left to right, describing a positive or direct relationship between the prices of the commodities and supply.

You are free to use this image on your website, templates, etc., Please provide us with an attribution linkArticle Link to be Hyperlinked
For eg:
Source: Supply Schedule (wallstreetmojo.com)

#2 – Market Supply Schedule

A market supply schedule is a table that lists the various price levels of particular goods and the quantities that two or more producers or suppliers are willing to offer for sale in a given period. The last column shows the aggregate amount of goods supplied in the market by all the suppliers at different prices. For instance,

Here is the formula to represent the above schedule:

Sm= Sa + Sb + ….

Where Sm = Market Supply Schedule

Sa = Individual Supplier A

Sb= Individual Supplier B 

Example

Now, let us understand how the concept works with a supply schedule example:

In a monopolistic market, XYZ automobiles are the largest supplier of mopeds. As the demand for these mopeds increases in the market, their price and supply also rise over the period. For example, if the price of a commodity is $2000, its supply is 300 units. Similarly, when its price increases to $2400, its supply increases too to 500 units. Given below, table 1 shows the supply schedule example:

(Table 1)

Suppose there are two moped suppliers, ABC automobiles and XYZ automobiles, in the market, then the schedule of market supply will be:

(Table 2)

Based on the above table 1, let us draw the individual supply curve for XYZ automobiles:

You are free to use this image on your website, templates, etc., Please provide us with an attribution linkArticle Link to be Hyperlinked
For eg:
Source: Supply Schedule (wallstreetmojo.com)

Here, on the above supply curve, the y-axis shows the moped prices, and the x-axis labels the quantity supplied.

Frequently Asked Questions (FAQs)

What does a firm’s supply schedule show?

A firm’s supply schedule helps to make the supply curve. It comprises the prices of products and services and the amount of that product or service the firm would supply at each price at a given time.

What does a supply schedule show? 

The supply schedule depicts the change in quantities of a particular product that a producer or supplier is ready to sell at different prices. It means that the amount of commodity supplied varies with the alteration in its price.

How to solve the supply schedule?

A supply schedule ends up in the preparation of a supply curve. The foremost step is to collect data and prepare a spreadsheet with one column for price and the other/others showing the quantity supplied (individual or market schedule of supply) as per the requirement.

Then, based on this table or spreadsheet, prepare a graph where the y-axis shows the prices and the x-axis marks the quantity. Finally, connect all the points to form a supply curve.

What is a federal supply schedule?

The federal supply schedule is also called the GSA. By signing this long-term government contract with commercial companies, the government avails the benefits of millions of commercial products and services, and that too at a reasonable price.

Recommended Articles

This has been a guide to the Supply Schedule and its definition. We explain its types, example, and factors affecting it along with a detailed explanation. You can learn more from the following articles –

• Supply-Side Economics
• Demand and Supply Analysis
• Aggregate Supply