Supply function

Supply function and equation

Supply functions, then, may be classified according to the source from which they come: consumers or firms. Each type of supply function is now considered in turn. In so doing, the following notational conventions are employed: There are I produced goods, each defining a single industry, and J factors. The indices i = 1,..., I and J = 1,..., J run, respectively, over produced goods (industries) and factors. Let n index all goods by first listing produced goods and then factors so that n = 1,..., I, I + 1,..., I + J. The number of firms in industry i is written L i, and these firms are indexed by l = 1,..., L i. There are K consumers enumerated as k = 1,..., K. The variable ${\displaystyle y_{I+jk}}$represents the quantities of factor j consumed by consumer k. This person can have endowments of good j from ${\displaystyle {\bar {y}}_{I+1k}}$to ${\displaystyle {\bar {y}}_{I+jk}}$. If ${\displaystyle y_{I+jk}}$ < ${\displaystyle {\bar {y}}_{I+jk}}$then person k is a supplier of j. If the opposite is true, they are a consumer of j.