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Expansion in supply refers to a situation when the producers are willing to supply a :
- a)larger quantity of the commodity at the decreased price
- b)larger quantity of the commodity due to increased taxation on that commodity
- c)Larger quantity of the commodity at the same price
- d)Larger quantity of the commodity at an increased price
Correct answer is option 'D'. Can you explain this answer?
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Expansion in supply refers to a situation when the producers are willi...
Larger quantity of the commodity at an increased price
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Expansion in supply refers to a situation when the producers are willi...
Expansion in supply refers to a situation when the producers are willing to supply a larger quantity of the commodity at an increased price.
Explanation:
Expansion in supply occurs when producers are willing and able to increase the quantity of a commodity they are willing to sell in the market. This is usually a result of various factors such as increased demand, improved production technologies, or favorable market conditions.
Factors influencing expansion in supply:
Several factors contribute to an expansion in supply:
1. Increased demand: If there is an increase in demand for a particular commodity, producers may expand their supply to meet the growing market needs. Higher demand often leads to higher prices, which in turn incentivizes producers to increase their supply.
2. Improved production technologies: Technological advancements can increase the efficiency and productivity of producers, allowing them to produce more output for the same cost. This leads to an expansion in supply as producers can now offer a larger quantity of the commodity in the market.
3. Favorable market conditions: Changes in market conditions can also influence the expansion in supply. For example, if the cost of raw materials or production inputs decreases, producers may be incentivized to increase their supply and take advantage of lower production costs.
Impact on price:
Expansion in supply typically leads to a decrease in price. When producers are willing to supply a larger quantity of a commodity, the market becomes more competitive, and sellers may need to lower their prices to attract buyers. This is because the increased supply puts downward pressure on prices as producers try to sell their larger quantity of goods.
However, it is important to note that expansion in supply does not always result in a decrease in price. If the increase in demand is significant enough to absorb the larger supply, prices may remain stable or even increase. Additionally, factors such as changes in production costs or government regulations can also influence the price of the commodity.
In conclusion, expansion in supply refers to a situation when producers are willing to supply a larger quantity of a commodity at an increased price. This expansion is driven by factors such as increased demand, improved production technologies, and favorable market conditions. The impact on price depends on various factors and can result in either a decrease, stability, or increase in prices.
Explanation:
Expansion in supply occurs when producers are willing and able to increase the quantity of a commodity they are willing to sell in the market. This is usually a result of various factors such as increased demand, improved production technologies, or favorable market conditions.
Factors influencing expansion in supply:
Several factors contribute to an expansion in supply:
1. Increased demand: If there is an increase in demand for a particular commodity, producers may expand their supply to meet the growing market needs. Higher demand often leads to higher prices, which in turn incentivizes producers to increase their supply.
2. Improved production technologies: Technological advancements can increase the efficiency and productivity of producers, allowing them to produce more output for the same cost. This leads to an expansion in supply as producers can now offer a larger quantity of the commodity in the market.
3. Favorable market conditions: Changes in market conditions can also influence the expansion in supply. For example, if the cost of raw materials or production inputs decreases, producers may be incentivized to increase their supply and take advantage of lower production costs.
Impact on price:
Expansion in supply typically leads to a decrease in price. When producers are willing to supply a larger quantity of a commodity, the market becomes more competitive, and sellers may need to lower their prices to attract buyers. This is because the increased supply puts downward pressure on prices as producers try to sell their larger quantity of goods.
However, it is important to note that expansion in supply does not always result in a decrease in price. If the increase in demand is significant enough to absorb the larger supply, prices may remain stable or even increase. Additionally, factors such as changes in production costs or government regulations can also influence the price of the commodity.
In conclusion, expansion in supply refers to a situation when producers are willing to supply a larger quantity of a commodity at an increased price. This expansion is driven by factors such as increased demand, improved production technologies, and favorable market conditions. The impact on price depends on various factors and can result in either a decrease, stability, or increase in prices.
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Expansion in supply refers to a situation when the producers are willing to supply a :a)larger quantity of the commodity at the decreased priceb)larger quantity of the commodity due to increased taxation on that commodityc)Larger quantity of the commodity at the same priced)Larger quantity of the commodity at an increased priceCorrect answer is option 'D'. Can you explain this answer?
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Expansion in supply refers to a situation when the producers are willing to supply a :a)larger quantity of the commodity at the decreased priceb)larger quantity of the commodity due to increased taxation on that commodityc)Larger quantity of the commodity at the same priced)Larger quantity of the commodity at an increased priceCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Expansion in supply refers to a situation when the producers are willing to supply a :a)larger quantity of the commodity at the decreased priceb)larger quantity of the commodity due to increased taxation on that commodityc)Larger quantity of the commodity at the same priced)Larger quantity of the commodity at an increased priceCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Expansion in supply refers to a situation when the producers are willing to supply a :a)larger quantity of the commodity at the decreased priceb)larger quantity of the commodity due to increased taxation on that commodityc)Larger quantity of the commodity at the same priced)Larger quantity of the commodity at an increased priceCorrect answer is option 'D'. Can you explain this answer?.
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