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Observe the market supply schedule of potatoes and answer the following question: Draw the market supply curve from the schedule and explain it. - Economics

Diagram

Observe the market supply schedule of potatoes and answer the following question:

Price in ₹ Firms Market supply (kg)
A B C
1 ____ 20 45 100
2 37 30 45 _____
3 40 ____ 55 155
4 44 50 ____ 154

Draw the market supply curve from the schedule and explain it.

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Solution

Price in ₹ Firms Market supply (kg)
A B C
1 35 20 45 100
2 37 30 45 112
3 40 60 55 155
4 44 50 60 154

  • In the diagram, the quantity supplied is shown on the X-axis and the price on Y-axis.
  • Supply curve SS slopes upward from left to right indicating a direct relationship between price and market supply.
  • It is pertinent to note that when the price rises from price 3 to price 4, the supply more or less remains the same at 155 quantity supply.
  • This shows that agricultural goods are an exception to the law of supply. Their supply is inelastic in the short term.
Concept: Supply Analysis
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APPEARS IN

Balbharati Economics 12th Standard HSC Maharashtra State Board
Chapter 4 Supply Analysis
Exercise | Q 5. (B)(1) | Page 45
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