Question

State with reason whether you agree or disagree with the following statement:

There are some exceptions to the law of supply.

Options

• Agree

• Disagree

Answer 1

I Agree with the given statement.

Reason:

There are indeed some exceptions to the Law of Supply. The Law of Supply states that, all else being equal, an increase in the price of a good or service will lead to an increase in the quantity supplied. However, in certain situations, this may not hold true due to various constraints.

Exceptions to the Law of Supply:

1. Perishable goods: Goods like fruits, vegetables, and dairy products cannot be stored for long. Even if prices rise, suppliers may not be able to increase the supply because these goods spoil quickly.
2. Fixed supply: Some goods, such as rare antiques, limited-edition items, famous paintings, or land, have a fixed supply. Even if the price increases, the supply cannot be increased.
3. Short-term supply constraints: In the short run, producers may not be able to increase supply immediately due to production capacity limitations, scarcity of raw materials, or time constraints.
4. Government regulations: In some cases, government policies, price caps, or legal restrictions may limit the supply of certain goods, preventing producers from increasing output despite rising prices.