Scanner - Supply and Elasticity of Demand

N.C.E.R.T Questions

(Q1) What is meant by law of supply ?

(Q2) What is meant by change in quantity supplied and change in supply ?

(Q3) Due to improvement of technology, the marginal costs of production of televisions have gone down. How will it affect the supply curve of television?

(Q4) What effect does a change in input price have on the supply curve?

(Q5) What effect does imposition of unit tax (an increase in excise tax rate) have on supply curve the product ?

(Q6) If a farmer grows rice and wheat how will an increase in the price of wheat affect the supply curve of rice ?

(Q7) What is meant by market period ?

(Q8) What does price elasticity of supply measure or quantify ?

(Q9) What is the price elasticity associated with a straight line supply curve passing through the origin ?

(Q10) Give two examples where technological progress leads to a shift in the supply curve.

(Q11) A new technique of production reduces the marginal cost of producing stainless steel How will this affect the supply curve of stainless steel utensils ?

(Q12) Because of cyclone in a coastal area, the sea level , covers a lot office fields. This reduces the productivity of land. How will it affect the supply curve of rice of the region ?

(Q13) Draw straight line supply curve with (a) Es = unitary (b) Es = zero

(Q14)

(a) Complete the table
(b) Plot supply curve of each firm and the market. What relationship do you observe between individual supply curve and the market supply curve ?
(c) Calculate Es of firm A when price rises from Rs2 to Rs 3

(Q15) What is the supply curve of the firm in short run ?

(Q16) A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increases to Rs 15 and the firm now earns revenue of Rs 150. What is the Es of the firm's?

(Q17) The market price of a good changes from Rs 5 to rs 20. As a result, the quantity supplies by a firm increases by 15 units. The Es is . 5 Find initial and final output levels of the firm.

(Q18) At market price of Rs 10, a firm supplies 4 units of output. The market price increases to Rs. 30 what quantity will the firm supply at new price if Given Es = 1.25

(Q19) Difference between Stock and supply ?

(Q20) Why more is suppied at higher prices ?

(Q21) Find and plot market supply

(Q22) There are three indentical firms in the market. The following table shows the supply schedule of firm 2 . Compute the market supply schedule

CBSE Questions

(Q1) State three causes of decrease in supply ?

(Q2) Draw straight line supply curve with Es equal to (i) one (ii) less than one (iii) more than one

(Q3) What is meant by supply schedule and market supply ?

(Q4) What causes a movement along a supply curve of a good ?

(Q5) When the supply of a commodity is called "elastic" ?

(Q6) What causes downward movement of supply curve ?

(Q7) Es= 0.8 . Is the supply elastic or inelastic ? why

(Q8) List any three determinants of supply of a commodity.

(Q9) Distinguish between increase in quantity supplied and increase in supply ?

(Q10) Explain three causes of rightward shift of supply curve ?

(Q11) Define price Es ? How it is measured by geometric method ? ( in case of straight line supply curve ) or Explain two method of measuring Es ?

(Q12) Explain four determinants of the market supply of a commodity ?

(Q13) A 5 percent rise in price of a commodity results in rise in its quantity supplied from 300 units to 370 units. Find Es ? Is its supply elastic ?

(Q14) The quantity supplied of a commodity fall from Rs 10 per unit to Rs 9 , its Q.S falls by 20 %.Find Es ?

(Q15) The Q.S of a commodity at a price of Rs 8 is 400 units. Its Es= 2. Calculate the price at which its Q.S will be 600 units .

(Q16) The Es = 2. when its price falls from Rs 10 to Rs 8 per unit, its Q.S fall by 500 units. Calculate the Q.S at reduced price ?

(Q17) When the price rises from Rs 10 to Rs 11 per unit, its Q.S rises by 100 units. Its Es = 2. Calculate its Q.S at increased price .
 

CBSE + Sample Paper Questions

(Q1) What is 'market supply' ?(1)

(Q2) What is the price elasticity of supply of a commodity whose straight line supply curve passes through the origin forming an angle of 75º ?(1)

(Q3) What is the likely effect on the supply of a good if the prices of the inputs used in production of that good fall? Explain.(4)

(Q4) Draw supply curves with price elasticity of supply throughout equal to

(i) zero (ii) one
(iii) infinity and (iv) less than one.

(Q5) Distinguish between (i) elastic and inelastic supply and (ii) Perfectly elastic and perfectly inelastic supply.

(Q6) What is the likely effect on the supply of a god if a unit tax is imposed on that good ? Explain.

(Q7) What is the likely effect of technological progress on the supply of a good? Explain.

(Q8) State the law of supply. What is meant by the assumption other things remaining the same on which the law is based? (3)

(Q9) What will be the price elasticity of supply if the supply curve is a positively sloped straight line?

(Q10) Give one reason for rightward shift in supply curve ?(1)

(Q11) Explain the effect of fall in prices of other goods on the supply of a given good(3)

(Q12) The price elasticity of supply of commodity Y is half the price elasticity of supply of commodity X. 16 percent rise in the price X results in a 40 percent rise in its supply. If the price of Y falls by 8 percent, calculate the percentage fall in its supply.(4)

CBSE + Sample Paper Questions

(Q1) Total revenue is Rs. 400 when the price of the commodity is rs. 2 per unit. when price rises to Rs. 3 per unit, he quantity supplied is 300 units. Calculate the price elasticity of supply.(3M)

(Q2) What is the price elasticity of supply of a commodity whose straight line supply curve passes through the origin forming an angle of 75° ?(1M)

(Q3) State the 'law of supply'. What is meant by the assumption 'other things remaining the same' on which the law is based ?(3 M)

(Q4) The price elasticity of supply of good X is half the price elasticity of supply of Good Y. A 10% rise in the price of good Y results in a rise in its supply from 400 units to 520 units. Calculate the percentage change in quantity supplied of good X when its price falls from Rs 10 to Rs 8 per unit.

(Q5) Explain the effect of the following on the supply of a commodity:(3 M)

(a) Fall in the prices of factor inputs.(b) Rise in the prices of other commodities.

(Q6) What will be the price elasticity of supply at a point on a positively sloped, straight line supply curve?(3M)

CBSE Questions

(Q1) What is 'decrease' in supply ?(1 mark)

(Q2) Explain the distinction between "change in quantity supplied" and "change in supply". Use diagram.

OR
Explain the distinction between "change in quantity supplied" and "change in supply" with the helpof a table.(6 marks)

(Q3) Explain how changes in prices of inputs influence the supply of a product.

(Q4) Define Market Supply . What is the effect on the supply of a good when government imposes a tax on the production of that good ? 

(Q5) What is a Supply schedule . What is the effect on the supply of a good when government gives a subsidy on the production of that good ?

(Q6) The price of a commodity is rs 10 per unit and total revenue from it is Rs 1000. Its price elasticity of supply is O.8 . Its price falls by 10 % . Calculate the total revenue at the reduced price.Ans: 828

C.B.S.E & Sample Paper Questions

(Q1) Give one reason for an "increase" in supply of a commodity.(1 M)

(Q2) Give one reason for "decrease" in supply of a commodity.(1 M)

(Q3) Give the meaning of market supply.(1 M)

(Q4) Define supply.(1 M)

(Q5) A 15 percent rise in the price of a commodity raises its supply from 300 units to 345 units.Calculate its price elasticity of supply.(3 M)

(Q6) The price elasticity of supply of a commodity is 2.0. A firm supplies 200 units of it at a price of Rs. 8 per unit. At what price will it supply 250 units ?(3 M)

(Q7) A firm supplies 10 units of a good at a price of Rs. 5 per unit. Price elasticity of supply is 1.25.What quantity will the firm supply at a price of Rs. 7 per unit ?(3 M)

(Q8) Price elasticity of supply for a commodity is 5. When price of the commodity rises from Rs. 9 per unit to Rs.10 per unit, supply rises by 25 units. Calculate quantity supplied at Rs. 9 per unit.[ Ans. 45 units ]

(Q9)  Total revenue of a firm rises from Rs 100 to Rs 300 when the price of its product rises from Rs 20 per unit to Rs 30 per unit calculate elasticity of supply ?

(Q10) Total revenue of a firm risse from Rs 400 to Rs 500 when the price of its product rises from Rs 20 per unit to Rs 25 per unit calculate elasticity of supply ?

(Q11)  When is elasticity of supply called inelastic ?

Ans :: W hen proportionate change in supply is less than proportionate change in price.

(Q12) Explain the differnece between Movement along the Supply and 'Shift of Supply Curve' ? use digram

Ans: Movement along the Supply curve takes place when supply changes only on account of change in own price of the good. For example movement from point A to B implies that supply has risen from OQ1 to OQ2 on account of rise in price from OP1 to OP2 'Shift of Supply Curve' takes place when supply changes on account of any factor other than own price of the good. For example, movement from A to B or from B to C is not on account of change in price OP. It must be on account of some other factor.

C.B.S.E Paper 

(Q1) What is market supply of a product ?(1M)

Ans: Market supply of a good is the total quantity that all producers are willing to supply at a given price during a specified period of time.

(Q2) Explain how technological progress is a determinant of supply of a good by a firm.(3M)

Ans: Technological progress lowers the cost of producing output. When the market price of the good remains unchanged, lower production costs raise per-unit profit. Higher profitability encourages firms to produce more, causing the firm's supply curve to shift to the right.

(Q3) Explain how input prices are a determinant of supply of a good by a firm.(3M)

Ans: When input prices rise, the cost of production increases. If the product's market price stays the same, higher costs reduce profits and firms supply less; the supply curve shifts left. Conversely, if input prices fall, production becomes cheaper, profits rise and firms supply more, shifting the supply curve to the right.

(Q4) Explain any three causes of decrease in supply of a good.(3M)

(Q5) Explain the effect of -(6M)

(i) Technological advancement ; and
(ii) Subsidy on production of a good on supply of a commodity.

(Q6) How does change in per unit tax effect supply of good by a firm ?

Ans: If the per-unit tax is increased, the producer's cost per unit rises. With the selling price unchanged, higher costs reduce profit margin and discourage production, so supply falls and the supply curve shifts left. A reduction in per-unit tax lowers cost per unit, raises profit at the same price and encourages more supply (rightward shift).

Sample Paper Questions

(Q1) What is meant by change in supply and change in quantity supplied ?

Ans: Change in quantity supplied is a movement along the supply curve that occurs when the own price of the good changes - for example, an increase in price causes an expansion of quantity supplied, and a fall in price causes a contraction.
Change in supply is a shift of the entire supply curve, caused by factors other than the good's own price (for example, input costs or technology). An increase in supply shifts the curve rightward (more supplied at each price); a decrease shifts it leftward.

(Q2) 'Supply curve is the rising portion of marginal cost curve over and above the minimum of Average Variable cost curve'. Do you agree? Support your answer with valid reason. (3M)

Ans: Yes. The supply curve coincides with the rising portion of the marginal cost curve that lies above the minimum point of the average variable cost. A firm will supply only when price covers the variable cost; below that point it would prefer to shut down. Therefore, the portion of MC above the AVC minimum shows quantities a firm is willing to supply at different prices.

(Q3) Distinguish between stock and supply.

Ans: Stock is the total quantity of a commodity currently held or available with sellers at a point in time. Supply is the quantity sellers are willing to sell at different prices over a specified period. Stock is a static concept; supply refers to quantity offered at various prices over time.

(Q4) Apply the geometric method to determine the elasticity of supply at point L on the supply curve SS given above.3(M)

C.B.S.E Paper Questions

(Q1) Explain the significance of 'minus sign' attached to the measure of price elasticity of demand in case of a normal good, as compared to the 'plus sign' attached to the measure of price elasticity of supply.(3M)

Ans: The price elasticity of demand carries a minus sign because price and quantity demanded move in opposite directions (an inverse relationship) for a normal good. The price elasticity of supply carries a plus sign because price and quantity supplied move in the same direction (a direct relationship). The signs remind us of these opposite effects.

(Q2) 'Supply curve is the rising portion of marginal cost curve over and above the minimum of Average Variable cost curve'. Do you agree? Support your answer with valid reason.[SP (3M)]

(Q3) What is 'change in supply' ? Explain the effect of tax imposed on a good on the supply of the good.

Ans: "Change in supply" refers to an increase or decrease in supply arising from factors other than the good's own price (for example changes in input costs, technology or taxes). Imposition of a tax raises production cost per unit; with the product price unchanged, profits fall, so producers supply less and the supply curve shifts to the left.

(Q4)  Explain the effect of the following on market supply of a good : (6)

(a) Increase in input prices (b) Reduction in per unit tax

Ans: (a) When input prices increase, production costs rise. With product prices unchanged, profits decrease and firms reduce output; market supply falls and the supply curve shifts left.
(b) A reduction in per-unit tax lowers producers' costs. With product prices unchanged, profits rise and firms supply more; market supply increases and the supply curve shifts right.

(Q5)  Giving reasons, state whether the following statements are true or false : "The supply curve of a good shifts to the right when prices of other goods rise."

Ans: False. When the prices of other goods rise, producers may find it more profitable to produce those other goods instead of the given good. As resources are reallocated away from the original good, its supply tends to fall and its supply curve shifts left, not right.