Linear Supply Function

What is this formula?

The Linear Supply Function models the relationship between price and quantity supplied using a straight-line supply curve.

It assumes that producers are willing to supply more output as the market price increases.

When to use it

Use this formula in microeconomics, market analysis, pricing studies, and supply-demand equilibrium calculations.

Example

Supply intercept:

a = 100

Supply slope:

b = 15

Price:

P = 20 USD

Formula:

Qs = a + bP

Substitution:

Qs = 100 + (15 × 20)

Qs = 400 units

Result:

At a market price of 20 USD, producers supply 400 units.

Applications

- Supply estimation

- Market equilibrium analysis

- Producer behavior studies

- Economic education

- Price forecasting

Note

The linear supply function is a simplified representation of producer behavior. Real supply relationships may be nonlinear and influenced by production costs, technology, taxes, regulations, and resource availability.