Advertisements
Advertisements
Questions
Explain the law of supply.
State the law of supply.
What is law of supply?
Advertisements
Solution
The law of supply shows a direct relationship between the price of a good and the quantity supplied. As the price rises, the quantity supplied also increases. This scenario is represented by an upward-sloping supply curve. This happens mainly due to two reasons:
- Profit Motivation: When the price of a product goes up, the chance of earning more profit also increases (assuming other factors remain the same). This encourages producers to supply more of that product.
- Rising Production Costs: As production increases, the cost of making each additional unit (marginal cost) also rises. So, producers are willing to produce and supply more only if the price is high enough to cover these extra costs.
APPEARS IN
RELATED QUESTIONS
State and explain the law of supply with exceptions.
State with reason whether you agree or disagree with the following statement:
There is a direct relationship between price and quantity supplied.
The relationship between the price of a commodity and the supply of commodity is
What are the reasons for upward sloping supply curve?
What are the factors governing the elasticity of supply?
State and explain the elasticity of supply.
Elucidate the Laws of Returns to Scale. Illustrate.
A rightward shift in supply curve shows ______.
Law of supply states that ______.
The Law of Supply states that other things being constant ______.
Assertion (A): Law of Supply is a qualitative statement.
Reason (R): Law of Supply indicates the magnitude of change in the quantity supplied.
The producers prefer to supply more when prices are ______.
Price and Supply move in the same direction. Justify the statement.
With the help of a diagram state whether supply of a good is directly or inversely related to price?
State and explain the law of supply with the help of a diagram.
What is supply function?
Which statement best expresses the Law of Supply?
Which of the following is NOT an assumption of the Law of Supply?
What happens to the quantity supplied if the price of potatoes rises from ₹1 to ₹5 per kg, according to the supply schedule?
Why does the Law of Supply not apply to rare goods like antiques and old coins?
Which of these situations violates the "ceteris paribus" (other things being constant) condition for the Law of Supply?
Which of the following is an exception to the Law of Supply?
Which factor is assumed to remain unchanged under the Law of Supply?
What does the supply curve typically look like according to the Law of Supply?
Which real-life example best illustrates the Law of Supply?
