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1) under law of supply ceteris paribus conditions include...
(a) production technology
(b) Future expectation about price
(c) cost of Factors of production
(d) All of these?
(a) production technology
(b) Future expectation about price
(c) cost of Factors of production
(d) All of these?
Most Upvoted Answer
1) under law of supply ceteris paribus conditions include... (a) produ...
Understanding Ceteris Paribus in the Law of Supply
Ceteris paribus, a Latin phrase meaning "all other things being equal," is crucial in economic analysis, particularly in the law of supply. Under this principle, several factors are held constant to isolate the effect of price changes on the quantity supplied.
Key Ceteris Paribus Conditions
Conclusion
In summary, the law of supply operates under ceteris paribus conditions, meaning that changes in production technology, future price expectations, and the cost of factors of production must remain constant to accurately assess the relationship between price and quantity supplied. All these factors are interrelated, and any change in one can disrupt the equilibrium in supply, emphasizing the importance of the ceteris paribus assumption in economic analysis.
Ceteris paribus, a Latin phrase meaning "all other things being equal," is crucial in economic analysis, particularly in the law of supply. Under this principle, several factors are held constant to isolate the effect of price changes on the quantity supplied.
Key Ceteris Paribus Conditions
- Production Technology: Advances or changes in production technology can significantly affect supply. If technology improves, firms can produce more efficiently, increasing supply at the same price level.
- Future Expectations About Price: If suppliers expect prices to rise in the future, they may withhold current supply to sell more later, thus affecting the current supply levels.
- Cost of Factors of Production: The cost of inputs like labor, materials, and overhead directly influences supply. If these costs rise, the supply may decrease at existing prices, and vice versa.
Conclusion
In summary, the law of supply operates under ceteris paribus conditions, meaning that changes in production technology, future price expectations, and the cost of factors of production must remain constant to accurately assess the relationship between price and quantity supplied. All these factors are interrelated, and any change in one can disrupt the equilibrium in supply, emphasizing the importance of the ceteris paribus assumption in economic analysis.
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1) under law of supply ceteris paribus conditions include... (a) production technology(b) Future expectation about price(c) cost of Factors of production(d) All of these?
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1) under law of supply ceteris paribus conditions include... (a) production technology(b) Future expectation about price(c) cost of Factors of production(d) All of these? 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 1) under law of supply ceteris paribus conditions include... (a) production technology(b) Future expectation about price(c) cost of Factors of production(d) All of these? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 1) under law of supply ceteris paribus conditions include... (a) production technology(b) Future expectation about price(c) cost of Factors of production(d) All of these?.
1) under law of supply ceteris paribus conditions include... (a) production technology(b) Future expectation about price(c) cost of Factors of production(d) All of these? 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 1) under law of supply ceteris paribus conditions include... (a) production technology(b) Future expectation about price(c) cost of Factors of production(d) All of these? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 1) under law of supply ceteris paribus conditions include... (a) production technology(b) Future expectation about price(c) cost of Factors of production(d) All of these?.
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