Offer function

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In economics, the supply function is the relationship between the price of a good and the amount of goods offered.

The term can refer both to individual providers ( individual offer function ) and to the totality of individual offers in a market.

If one denotes the quantity of goods offered with (for English supply ) and the price of the good in question , the relationship between supply and price can be expressed as a mathematical function . It is also possible to describe the aforementioned relationship using the inverse function , which assigns the appropriate offer price to each quantity. If the supply curve grows strictly monotonically and is thus invertible, both notations are equivalent. The function is also referred to in the literature as the inverse supply function. A range shift occurs when in the supply function variables change that in the derivation of the function are kept constant.

The total offer on a market is obtained by aggregating the individual offers, i.e. by adding or integrating them. The graphical representation of a supply function is also known as a supply curve.

Individual evidence

  1. ^ Definition in the Gabler Wirtschaftslexikon