Supply Side
The supply curve of a factor of production depends on the various conditions governing its supply. Take the case of labour-a very important productive service. The supply of labour depends on the size and composition and geographical distribution. labour efficiency. cost of education and training, costs of movement, the expected income. relative preference for work and leisure. and so on. In this manner. by for work and leisure. and so on. In this manner. by considering all the relevant factors. it is possible to construct the supply curve or a productive service. We may. however. add that the supply is 3 bit complicated affair. We generally say that the supply of land is limited. But the fact is that although for the community as a whole. land is limited. but for a particular firm or an industry. its supply is not limited. The supply can be increased. jf higher rent is offered. In the case of commodities. we see that generally an increase in price brings forth larger supplies. This. however. docs not necessarily hold good in the case or the factors of production. It may happen in some cases that if wages go up. labour may be able to satisfy their needs by working for a short time. They may prefer leisure to work. In this case. when the price of a factor (or its remuneration) is increased, the supply is contracted. This peculiarity will be represented by a backward sloping curve after a stage. Also. the supply of labour does not merely depend on economic factors; many non-economic considerations also enter. All thc same, we can lay down it general rule that if the price of a factor increases. its supply will also generally increase. and vice versa. Hence. the supply curve of a factor rises from left to right upwards.