Question

Discuss any two exceptions to the law of supply.

Answer 1

1. Agricultural Goods: The supply of agricultural goods depends more on natural factors such as the amount of rainfall, fertility of the soil and natural calamities, etc. and less on their prices. If, due to unforeseen changes in weather, the production of agricultural products is low, then their supply cannot be increased even at higher prices.
2. Perishable Goods: The supply of perishable goods like milk, vegetables, fish, eggs, etc., is also not affected by their prices. Sellers cannot hold such goods for long.
3. Goods of Auction: The law also does not apply in the case of goods of auction because their supply is always limited and fixed, which cannot be changed at all.
4. Rare Paintings: It may quite happen that the supply is more or less fixed, as in the case of rare paintings by the same renowned painter (or deceased artists) and will not vary with changes in price.
5. Backward Countries: In economically backward countries, production and supply cannot be increased with a rise in price due to a shortage of resources.