Study of Economics in Nepal

Supply and Supply Function Supply Supply is the quantity of goods and services produced by a producer, which are ready for trade in the market at a fixed price and on time.  While demand in the market is affecting production and supply, supply also affects demand. As the demand for the product increases, so does the price increase, which has a positive effect on the producer's profit and motivates for more production and supply. Therefore, price increase means increase in supply. The change in price and the change in supply are directly proportional to each other. Which is explained by the law of supply. i.e Qsx = f(Px) = α+βPx

Demand Concept of Demand Demand is defined as the effective desire for a good or service backed by ability and willingness to pay. It is also defined as the quantity of a good or service which a consumer would buy in a market at a given price and time period.   Demand Function The demand for a particular commodity is influenced by so many factors-they together are known as determinants of demand in technical jargon. A demand function in mathematical term expresses functional relationship between the demand for a product and its various determining factors. For instance,  Qdx = f(Px, Py, Y, Adv, T&P, F, Cl, Pop, Gp, Exp., Dist. ......) Types of Demand Function 1. Short Run Demand Function: Qdx = f(Px) ...........OTRS 2. Long Run Demand Function: Qdx = f(Px, Py,  Y, Adv, T&P, F, Cl, Pop, Gp, Exp., Dist., ......) 3. Linear Demand Function: The slope of the demand curve remains constant throughout its length is known as LDF. In other words, if both independent...