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Market supply schedule and curve

By adding up the quantity supplied at various prices by all the sellers in the market, we can get the market supply schedule. Market supply curve is the lateral summation of the individual supply curves of all the suppliers in the market.
  • ƒWhy supply curve shows upward trend?
    • Profit motive: The main objective of the suppliers is to make more profit. This is possible only when they can sell the goods at higher prices. That’s why SS curve shows upward trend as suppliers supply more at higher price.
    • …Law of diminishing marginal productivity: The law says the use of more units of variable factors increases the cost of production. So, in order to cover the increased cost producers have to supply at higher prices.

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