CA Foundation Exam > CA Foundation Questions > Increase or decrease in supply means:a)Change...
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Increase or decrease in supply means:
- a)Change in supply due to change its own price
- b)Change in supply due to change in factors other than its own price
- c)Both of above
- d)None of above
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Increase or decrease in supply means:a)Change in supply due to change ...
An increase in supply:
An increase in supply means that at each of the prices there is now an increase in the quantity supplied—meaning that the curve shifts to the right.
Most Upvoted Answer
Increase or decrease in supply means:a)Change in supply due to change ...
Explanation:
Supply refers to the amount of a product or service that producers are willing and able to offer for sale at a given price. It is influenced by various factors, including the price of the product itself, the cost of production, availability of resources, technology, government regulations, and so on.
Increase or decrease in supply means a change in the quantity of a product that producers are willing to supply at each price level. This change can occur due to two factors:
1. Change in supply due to change in its own price:
When the price of a product increases, producers are willing to supply more of it because they can earn higher profits. This leads to an increase in supply. Conversely, when the price of a product decreases, producers may reduce their supply as they can earn lower profits. This leads to a decrease in supply.
2. Change in supply due to change in factors other than its own price:
Factors other than the price of the product itself can also influence the supply of a product. For example, if the cost of production increases, producers may reduce their supply as it becomes less profitable. On the other hand, if the cost of production decreases, producers may increase their supply. Similarly, if there is an increase in demand for a product, producers may increase their supply to meet the demand, even if the price remains the same.
Therefore, the correct answer is option 'B' - Change in supply due to change in factors other than its own price.
Supply refers to the amount of a product or service that producers are willing and able to offer for sale at a given price. It is influenced by various factors, including the price of the product itself, the cost of production, availability of resources, technology, government regulations, and so on.
Increase or decrease in supply means a change in the quantity of a product that producers are willing to supply at each price level. This change can occur due to two factors:
1. Change in supply due to change in its own price:
When the price of a product increases, producers are willing to supply more of it because they can earn higher profits. This leads to an increase in supply. Conversely, when the price of a product decreases, producers may reduce their supply as they can earn lower profits. This leads to a decrease in supply.
2. Change in supply due to change in factors other than its own price:
Factors other than the price of the product itself can also influence the supply of a product. For example, if the cost of production increases, producers may reduce their supply as it becomes less profitable. On the other hand, if the cost of production decreases, producers may increase their supply. Similarly, if there is an increase in demand for a product, producers may increase their supply to meet the demand, even if the price remains the same.
Therefore, the correct answer is option 'B' - Change in supply due to change in factors other than its own price.
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Increase or decrease in supply means:a)Change in supply due to change its own priceb)Change in supply due to change in factors other than its own pricec)Both of aboved)None of aboveCorrect answer is option 'B'. Can you explain this answer?
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