Explain any two causes of "Decrease" in supply of a commodity.

1.	Explain any two causes of "Decrease" in supply of a commodity.
Answer» Two causes of decrease in supply are: (i) Imposition of Unit Tax: It raises cost. Price remaining unchanged, profits fall. This leads to ‘decrease’ in supply. (ii) Rise in Prices of Inputs: It raises cost. Price remaining unchanged, profits fall. This leads to ‘decrease’ in supply.

Answer»

Two causes of decrease in supply are:

(i) Imposition of Unit Tax: It raises cost. Price remaining unchanged, profits fall. This leads to ‘decrease’ in supply.

(ii) Rise in Prices of Inputs: It raises cost. Price remaining unchanged, profits fall. This leads to ‘decrease’ in supply.

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