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An increase in the supply of a good is caused by
- a)Improvements in its technology
- b)Fall in the prices of other goods
- c)Fall in the price of factors of production
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
An increase in the supply of a good is caused bya)Improvements in its ...
An increase in supply is caused by other factors other than price as such all the statements given here are true.
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An increase in the supply of a good is caused bya)Improvements in its ...
Explanation:
The increase in the supply of a good refers to the quantity of goods that producers are willing and able to sell at a given price level. The increase in supply can be caused by various factors, which are discussed below:
1. Improvements in technology:
When producers adopt new and advanced technology to produce goods, it reduces their cost of production. As a result, they can produce more goods at a lower cost, which leads to an increase in the supply of the good.
2. Fall in the prices of other goods:
When the prices of substitute goods fall, producers may switch their production to the good whose price has not fallen. This increase in production of the good whose price has not fallen leads to an increase in its supply.
3. Fall in the price of factors of production:
The factors of production, such as labor, raw materials, and capital, are used to produce goods. When the price of these factors falls, the cost of production decreases, and producers are able to produce more goods at a lower cost. This leads to an increase in the supply of the good.
Therefore, all the above factors, i.e., improvements in technology, fall in the prices of other goods, and fall in the price of factors of production, can cause an increase in the supply of a good.
The increase in the supply of a good refers to the quantity of goods that producers are willing and able to sell at a given price level. The increase in supply can be caused by various factors, which are discussed below:
1. Improvements in technology:
When producers adopt new and advanced technology to produce goods, it reduces their cost of production. As a result, they can produce more goods at a lower cost, which leads to an increase in the supply of the good.
2. Fall in the prices of other goods:
When the prices of substitute goods fall, producers may switch their production to the good whose price has not fallen. This increase in production of the good whose price has not fallen leads to an increase in its supply.
3. Fall in the price of factors of production:
The factors of production, such as labor, raw materials, and capital, are used to produce goods. When the price of these factors falls, the cost of production decreases, and producers are able to produce more goods at a lower cost. This leads to an increase in the supply of the good.
Therefore, all the above factors, i.e., improvements in technology, fall in the prices of other goods, and fall in the price of factors of production, can cause an increase in the supply of a good.
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An increase in the supply of a good is caused bya)Improvements in its technologyb)Fall in the prices of other goodsc)Fall in the price of factors of productiond)All the aboveCorrect answer is option 'D'. Can you explain this answer?
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An increase in the supply of a good is caused bya)Improvements in its technologyb)Fall in the prices of other goodsc)Fall in the price of factors of productiond)All the aboveCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about An increase in the supply of a good is caused bya)Improvements in its technologyb)Fall in the prices of other goodsc)Fall in the price of factors of productiond)All the aboveCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for An increase in the supply of a good is caused bya)Improvements in its technologyb)Fall in the prices of other goodsc)Fall in the price of factors of productiond)All the aboveCorrect answer is option 'D'. Can you explain this answer?.
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