Law of Supply

Law of supply stated that the quantity supplied of a good rises when the price of the good rises while other things equal. This shows that the quantity supplied is positively related to the price of the good. The supply curve is used to relate price of a good and the quantity supplied and the curve is upward sloping. The supply curve shows how much producers of the good offer for sale at any given price, holding constant all the other factors beyond price that influence producers’ decisions about how much to sell.

This relationship can change over time, which is represented by a shift in the supply curve. Any change that raises quantity supplied at every price shifts the supply curve to the right and is called an increase in supply. Similarly, any change that reduces the quantity supplied at every price shifts the supply curve to the left and is called a decrease in supply. There are many variables that can shift the supply curve. Some of the most important are input prices, technology, expectations and number of sellers. When one of these other variables changes, the supply curve shifts.

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Economic Analysis: Price of Fuel Supply Curve, S1 Supply Curve, S2 Increase in supply Quantity of Fuel Plastic wastes are generated from day-to-day activities of man as a result of its huge range of applications in our society today which includes but not limited to its extensive use as a packaging material, huge industrial and household applications.

Plastics are low-degradable materials and thus, pose a serious environmental issue in our society. Having encouraged reduction in the volume of plastic wastes produced, the extensive application of plastic materials hinders reduction of plastic wastes, leaving us with the option of recycling, which remains the most viable means of avoiding environmental pollution through landfill. However, from the article, Dr Muhamad Lebai noted that a good deal of plastic still ended up as waste although many people were recycling.

Malaysia produces some 5. 5 million tonnes of wastes a year and 20% of them are plastic wastes. Therefore, the government decided to consult experts to futher explore a technology to convert discarded plastics into fuel through the process, known as pyrolysis and this will shifts the supply curve of fuel. This is because the technology for turning plastic wastes into fuel is one of the determinant of supply.

Pyrolysis, which was demonstrated by Green Regalia, was a high impact technology innovation which gave a promising output and provides the advantages of reducing non-biodegradable waste. The development of the pyrolysis involved liquefying the plastic by burning it, slowly melts the plastic into gas and finally condensed into oil. From the article, Onnie Zurin said that 1kg of plastic could yield up to a litre of oil. By converting plastic wastes to oil, the advance in technology raised the supply of fuel.