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Question
Which of the following factor may cause decrease in supply.
Options
Fall in price of given product
Fall in price of factors of product
Decrease in number of firms
Expected fall in the price of given product in future
Solution
Decrease in number of firms
Explanation:
A decrease in the number of firms in the market would reduce the overall market supply, leading to a decrease in supply. This is because fewer firms would produce the product, reducing the quantity available for sale at any given price.
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RELATED QUESTIONS
Due to installation of a machine with latest technology, the cost of production has decreased. It will lead to ______.
Increase or decrease in supply means ______.
Match the following and select the correct option.
| Column I | Column II |
| (i) Expansion of supply | (A) Prices are expected to fall in future |
| (ii) Decrease in supply | (B) Fall in prices |
| (iii) Contraction of supply | (C) Prices are expected to rise in future |
| (iv) Increase in supply | (D) Rise in prices |
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