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Linear Supply Function

The supply function can be written in the form of an equation

Qs = c + dP

  • Where Qs is quantity supplied
  • C = the level of supply independent of price
  • P = the market price of the product
  • d is the coefficient of price
  • Supply for Product X = 10 + 2(P)
If the market price is £20, then Qs= 10 + 20 = 30 units

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