Question

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

Several factors determine the supply.

Options

• Agree

• Disagree

Answer 1

I agree with the above statement.

Reasons:

1. Many factors determine supply. The primary factor that determines supply is price. There is a clear correlation between price and supply.
2. The supply of commodities is determined by a number of other factors in addition to price, including the cost of production, the state of technology, government regulations, the nature of the market, the prices of other items, infrastructure, exports and imports, future expectations, natural circumstances, etc.
3. For instance, the supply tends to rise as a result of the usage of contemporary technology. On the other hand, supply usually declines at the going rate because of the use of antiquated technologies. In a similar vein, the availability of agricultural products is mostly dictated by environmental factors.

Thus, several factors determine the supply.