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Question
State with reason whether you agree or disagree with the following statement:
There are many exceptions to the law of supply.
Solution
I agree with the given statement.
Reason:
- Agricultural goods: The law of supply does not apply to agricultural goods. This is because their supply depends on weather conditions and they are produced in a specific season.
- Urgent need for cash: A seller who is in urgent need of cash may supply more quantity even at lower prices. The price may even be below the market price.
- Perishable goods: In case of perishable goods, the seller may supply more quantity even at lower prices in order to avoid losses.
- Rare goods: The supply of rare goods cannot be increased or decreased as per demand. Even if the price rises, the supply remains fixed.
- Labour supply: A labourer may be willing to work for more hours if he is earning higher amount of wages per hour. However, beyond a certain point, when the wage rate rises further, the supply of labour will decrease because the labourer would prefer leisure to work.
Therefore, there are many exceptions to the law of supply.
RELATED QUESTIONS
There are no exceptions to the law of supply.
Distinguish between Expansion of Supply and Increase in Supply.
Distinguish between Contraction of Supply and Decrease in Supply
Exceptions to the law of supply:
- Constant cost of production
- Constant technique of production
- Does not apply to agricultural goods
- No change in weather conditions
Give economic terms:
Rise in the quantity supplied of a commodity due to a rise in its price, other factors remaining constant −
Find the odd word
Exception to law of supply -
Downward movement along the same supply curve should ______.
Assertion (A): The supply curve of labour slopes downwards.
Reasoning (R): After a certain point of time, when wage rate rises, the supply of labour (hours of work) tends to fall.
State with reason whether you agree or disagree with the following statement:
The supply curve of labour is backward bending.
Identify and explain the concept from the given illustration:
Mahesh supplied (sold) more fruits at a comparatively low price due to the perishable nature of fruits.
- Assertion (A): Perishable goods are the exception to the Law of Supply.
- Reasoning (R): Perishable goods are sold in greater quantities only at higher prices.
Law of supply does not apply to ______.
The supply of perishable goods like milk, vegetables, fish is ______.
Discuss any two exceptions to the law of supply.
State one exception to the law of supply.
