Advertisements
Advertisements
Question
State with reasons, whether you Agree or Disagree with the following statements.:
Market supply depends upon price only.
Solution
No, we do not agree with the given statement. Besides price, the supply of a commodity is affected by a large number of other factors. The following are some of the factors that determine supply.
i. Price of related goods- With rise in prices of other goods, the supply of the good in question falls and vice-versa.
ii. Technology of production- With technological improvements, the cost of production falls leading to an increase in supply.
iii. Price of factors of production- If the price of factors rises, the input costs rises, leading to a fall in supply.
iv. Government policies- Depending upon the favourable or unfavourable policy decisions, supply changes.
v. Nature of market- In perfect competition, the supply of a commodity will be more as compared to the supply of good in a monopoly or single seller market.
vi. Expectation of future prices- If the future prices are expected to rise then the supply of a commodity will fall as the producer will hold the goods for future sale.
APPEARS IN
RELATED QUESTIONS
Price discrimination
Define market supply.
Explain the factor Input prices that can cause a change in supply.
Explain how input prices are a determinant of supply of a good by a firm.
Define ‘Market-supply’. What is the effect on the supply of a good when Government imposes a tax on the production of that good? Explain.
Give reasons or Explain the following statements. (Any Three)
Agricultural goods are exceptions to the law of supply.
Write Explanatory answer. (Any Two )
What do you mean by aggregate supply? Explain deteminants of aggregate supply?
Give reasons or explain the following statement:
Supply cannot exceed stock.
State Whether the following statements are TRUE or FALSE:
Due to the use of modern production technique supply will decrease.
Choose the correct answer :
In the long term supply becomes _________.
Give reasons or explain the following statement:
Due to speedy transport supply increases.
Fill in the blank with appropriate alternative given below
_________________________ determines the potential supply.
Define or explain the following concept:
Marginal Cost
Define or explain the following concept:
Average Revenue
Write short note on the following:
Percentage method.
Answer the following question:
Explain the concept of Total Cost, Average Cost and Marginal Cost.
