Supply Function

The supply function is the mathematical expression of the relationship between supply and those factors that affect the willingness and ability of a supplier to offer goods for sale

SX = Supply of goods

PX = Price

PF = Factor input employed (used) for production.

  • Raw material

  • Human resources

  • Machinery

O = Factors outside economic sphere.

T = Technology.

t = Taxes.

S = Subsidies

There is a functional (direct) relationship between price and supply.