Production And Costs

Sponsor Area

Question
CBSEENEC12012180

What is meant by law of supply?

Solution

The law of supply states, 'Other things being constant, quantity supplied of a commodity is directly related to the price of commodity', i.e., supply rises when price rises and supply falls when price falls.

Sponsor Area

Question
CBSEENEC12012181

What is meant by change in quantity supplied?

Solution

When quantity supplied of a commodity changes (rises or falls) due to change in its own price, it is called change in quantity supplied. Graphically it means movement along a supply curve.

Question
CBSEENEC12012182

What is meant by change in supply?

Solution

When change (rise or fall) in supply is caused by changes in 'factors other than the price', it is merely called change in supply. Graphically it means shift of supply curve.

Question
CBSEENEC12012183

Due to improvement of technology, marginal costs of production of televisions have gone down. How will it affect the supply curve of television?

Solution

The supply curve will shift to the right.