The relation between the quantities of a commodity supplied at a given price is shown in the supply schedule. In other words supply schedule is the tabular form of price and supply of a particular commodity for a stated period of time.
The supply schedule shows how the quantities supplied of a commodity differ with change in prices (other factors being constant.) It also depicts the willingness of the producers to supply more quantities at higher prices.
Supply schedule for Biscuits
Let us consider a hypothetical situation of supply of Biscuits which is depicted in the table above.
The law of supply focuses on the market price of the biscuits (per packet) and the supply by the producers. As you can see when the price of Biscuits is 15 Rupees per packet, the producers are not really interested in production of biscuits. This is because at this price the biscuit makers may not find it profitable to supply biscuits in the market. They may use the resources in producing some other goods that would fetch them more profits than biscuits. But as the price per packet of biscuit goes on increasing the quantities supplied also keep on increasing. This is because as the price increases it becomes profitable and the producers can thus keep on supplying biscuits in the market. The producers may employ more resources in the production of biscuits at the higher prices thereby increasing the supply.
The journey from point E to A depicts that at point E where the price is lowest there is no supply of the biscuits. This is in sharp contrast to the point A, where both the price and quantity is at maximum. At every point from E to A we can see that there is an increase in supply.
So the supply schedule of biscuits shows us the quantities of boxes of biscuits supplied in a year corresponding to the various prices. The above schedule depicts an upward movement both for price and quantity supplied.
Supply Curve
When we plot the supply schedule on a graph then we get the supply curve. The supply curve is an upward sloping curve showing direct relation between price of the commodity and its quantity supplied.
A typical supply curve is shown in the following diagra
Let us see how the supply curve looks for the above schedule of biscuits. The price per box (In Indian rupees) is shown on Y axis and X axis represents the quantities supplied of biscuits (million packets per year). The smooth curve SS1 is the supply curve of biscuits which is heading upwards.
Supply Curve for Biscuits
Thus we can see that the supply schedule and supply curve obey the law of supply and shows us how supply responds to increasing price of a commodity.