Law of supply states that, other things being equal, quantity supplied increases with increase in price and decreases with decrease in price of a commodity.
The law can be explained with the help of following schedule and diagram:
| Price(Rs.) |
Quantity (units) |
| 1 |
10 |
| 2 |
20 |
| 3 |
30 |
| 4 |
40 |
| 5 |
50 |
The above table shows that more and more units of the commodity are being offered for sale as the price of the commodity is increased. As seen in the diagram, supply curve SS slope upwards from left to right, indicating direct relationship between price and quantity supplied.
