1.

State with resons whether you agree or disagree with the following statements.Supply depends on many factors. OR Market Supply depends on many factors.

Answer»

Yes, I agree with this statement. 

OR 

Price is the only determinant of Supply.

No, I do not agree with this statement. Supply depends on many factors. Price is the main factor. There is a direct relationship between price and supply. 

Besides price there are many other factors such as:

  • Cost of production and supply are indirectly related. Higher the cost, lesser will be the supply.
  • State of technology i.e., advanced technology increases supply.
  • Government policy like subsidies encourage production and increases supply, whereas heavy taxation decreases supply.
  • Natural conditions like favourable weather condition increases supply.
  • Exports decreases supply and imports increases supply. Better infrastructure facility increases supply.
  • Nature of market like competitive market increases supply. Thus, the above statement is true.


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