Question

Statement 1: The supply of the commodity can also decrease when the price remains constant.

Statement 2: Due to the rise in the price of a factor of production or inputs.

Options

• Both the statements are true

• Both the statements are false

• Statement 1 is true but statement 2 is false

• Statement 1 is false but statement 2 is true

Answer 1

Statement 1 is true but statement 2 is false

Explanation:

When the price remains constant but supply decreases owing to factors other than the commodity's own price. It's known as a supply reduction. It could be due to a variety of factors, including an increase in the price of a production factor, an outmoded manufacturing technique, and so on.