Explain the supply function.

1.	Explain the supply function.
Answer» The supply function is a statement which states the relationship between the quantity supplied of a commodity and its determinants. The supply function may be written as where Sn is the quantity, supplied of a commodity ‘n’; If is a symbol showing the relationship between the supply of a commodity ‘n’ and all its determinants, Pn is the price of commodity ‘n’ : P1 … Pn-1 are the prices of commodities other than n. Cuf is the goal of the firms; Fi … Fn; is an expression of prices of different factors of production; T is the technique of production; E is a symbol of expectation of future prices, Cu+ is the taxation policy of the government; N is the natural factors and Nstands for means of transportation.

Answer»

The supply function is a statement which states the relationship between the quantity supplied of a commodity and its determinants. The supply function may be written as

where Sn is the quantity, supplied of a commodity ‘n’; If is a symbol showing the relationship between the supply of a commodity ‘n’ and all its determinants, Pn is the price of commodity ‘n’ : P1 … Pn-1 are the prices of commodities other than n. Cuf is the goal of the firms; Fi … Fn; is an expression of prices of different factors of production; T is the technique of production; E is a symbol of expectation of future prices, Cu+ is the taxation policy of the government; N is the natural factors and Nstands for means of transportation.

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