(a) What is a supply schedule? [2 marks]
(b) Using an example, show how a market supply schedule of a product is obtained from individual supply schedules. [12 marks]
(c) State three examples of exceptional demand. [6 marks]
Explanation
(a) A supply schedule is a table showing the various quantities of a commodity sellers are willing to sell at various prices, at a particular time.
(b) A market supply schedule shows the total quantities of a commodity which all the sellers of that commodity are willing to sell at various prices at a particular time. It is obtained by summing the individual supply schedules of all the sellers of the product. In the table below the individual supply schedule of Messrs P, Q and R are summed to obtain the market supply for the commodity.
| PRICE PER UNIT ($) | QUANTITY SUPPLIED | MARKET SUPPLY | ||
| MR.P | MR.Q | MR.R | ||
| 10 | 20 | 15 | 30 | 65 |
| 20 | 30 | 25 | 40 | 95 |
| 30 | 40 | 35 | 50 | 125 |
| 40 | 50 | 45 | 60 | 155 |
| 50 | 60 | 55 | 70 | 185 |
| 60 | 70 | 65 | 80 | 215 |
| 70 | 80 | 75 | 90 | 245 |
| 80 | 90 | 85 | 100 | 275 |
(c) Exceptional demand:
(i) Fixed demand or perfectly inelastic demand e.g. salt.
(ii) Perfectly elastic demand.
(iii) Expectation of future increase in price.
(iv) Articles of ostentation: These are goods bought at higher prices because buyers believe such goods put them in high class in the society.
(v) Giffen goods: These are goods for which quantity demanded diminish when price falls.