WAEC Economics 2012 Theory — Question 9

Model answer

(a) A supply schedule is a table showing the different quantities of a commodity that producers are willing and able to supply at various prices, over a given period of time. (b) A market supply schedule is obtained by horizontally summing (adding together) the quantities that each individual producer is willing to supply at each given price. For example, if at a price of ₦100, producer A supplies 10 units and producer B supplies 15 units, then the market supply at ₦100 is 25 units (10+15), and this is repeated at each price level to build the full market supply schedule. (c) Examples of exceptional supply (where the supply curve does not follow the normal upward-sloping pattern): (i) Supply of perishable goods (fixed/limited supply regardless of price in the very short run). (ii) Supply of labour at very high wage rates (backward-bending supply curve). (iii) Supply of antiques or rare works of art (fixed supply, cannot be increased regardless of price).