The supply function is similar to the demand function as well as it is also one of the principles of microeconomics. However while the demand is generated by from the consumers, the supply of goods and services is mostly handled by the suppliers and the resources that are available to them. The supply function is also a dependent function that is dependent on the prices of the resources, technology, state of the market, the number of suppliers in the market, taxes imposed on the suppliers, the subsidies provided to them as well as the prices of the complementary goods or associated products and services.
“The basic model of supply assumes that the amount supplied depends on the good’s own price, the prices of inputs used in its production, the technology of production, certain kinds of taxes, and perhaps other factors.” (‘Supply Function & Supply Curves’) Retailers are the suppliers in the market and they tend to increase sales by increasing demand and increasing the supply possible in the market as well to attain a favourable equilibrium for them that generated higher level of sales and profits. The retailers increase supply of their products and services by investing in updating and innovating their technological resource, applying for subsidies and acquiring resources like raw materials at lower costs. The retail businesses seek to maintain optimum level of supply in the market hat matches the demand in order to be cost effective as well as efficient in the market. Where the supply is greater than the demand, the suppliers seek to market themselves to increase the demand to meet the supply of their products and services in the market.
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