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Question
An extension of supply curve of Product X occurs when ______.
Options
The price of the product increases
The price of its inputs increases
The price of the product decreases
The price of its substitute decreases
Solution
An extension of supply curve of Product x occurs when the price of the product increases.
Explanation:
- An extension of supply occurs when there is an increase in the quantity supplied of a product in response to an increase in its price. This is represented by a movement along the supply curve to a higher quantity supplied, rather than a shift of the curve itself.
- When the price of Product X increases, suppliers are willing to supply more of the product, leading to an extension of the supply curve.
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RELATED QUESTIONS
What does the following table indicate?
| Price in (₹) | Quantity supplied in kg |
| 10 | 15 |
| 20 | 40 |
A change in the price of a good ______.
Read the following statements carefully and choose the correct alternative:
Statement (1): Increase in supply results from a fall in the price, other things being equal.
Statement (2): Contraction in supply results from a rise in price, other things being equal.
What is extension in supply? Show it diagrammatically.
| Price (₹ Per unit) | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Supply (units) | 0 | 0 | 2 | 4 | 6 | 8 | 10 | 12 | 14 |
What is meant by extension of supply?
What is meant by contraction of supply?
