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Give Reason Or Explain: When Price Rises, Supply Expands. - Economics

Short Note

Give reason or explain:

When price rises, supply expands.

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Solution

Supply of a good is positively related to the price of a commodity. That is, other things being constant, when the price of a good increases, its quantity supplied also increases. This is because higher prices implies higher profitability for the producers. Consequently, they prefer to increase the sales by increasing supply.

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APPEARS IN

Micheal Vaz Economics HSC 12th Standard Maharashtra State Board
Chapter 5 Producer's Behaviour
Exercise | Q 2.3 | Page 45
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