Theory of Supply

What is the Theory of Supply?

The theory of supply can be defined as the quantity of a commodity, that a producer is willing and ready to offer for sale at a particular price, place, and time.

Supply is not the same as the stock of goods in the storehouse or the total quantity produced.

If the producer produces 50 bags of millet and offers 23 bags of rice for sale, supply is 23 bags of rice brought to the market for sale, at a given price.

The total quantity in the factories is referred to as stock, while the quantity which enters the market at any time is the supply.