ABSTRACT
The theory of supply is one of the building blocks from which that part of economics known as price theory or microeconomics is constructed. Economics, according to a widely accepted definition, is the science which studies the relationship between ends (uses) and means (resources) which are scarce, in the sense that they are insufficient to satisfy all the alternative uses to which they may be applied. In order to assist in the analysis of the operation of the market system economists have devised a body of theory known as the theory of supply or the theory of the firm. Some economists have argued that the legitimate focus of interest is the aggregate supply curve and that the reality of the concept of the firm employed to derive that curve is irrelevant. This position has been challenged and has led, to a prolonged controversy within economics.
