ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Expectations: If suppliers expect prices to go up in the future, they decrease their supply today and save inventory to sell for a higher price in the future. S curve shifts left.

Detailed explanation-2: -Producers expect the price of their product to rise in the future-If producers expect the price of their product to rise in the future, they will supply less in the present and wait for the price to rise. This will cause supply to decrease and shift to the left.

Detailed explanation-3: -Expected future income and expected future prices influence demand today. For example, if the price of a computer is expected to fall next month, the demand for computers today decreases. The greater the number of buyers in a market, the larger is the demand for any good.

Detailed explanation-4: -Expectations regarding future prices: If the price of a commodity is rising today and it is likely to rise more in the future, people will buy more even at the existing price and store it up. They will do this in order to avoid the pinch of higher prices in the future.

Detailed explanation-5: -The law of supply states that the sellers are ready to sell more goods at a high market price of a commodity. One can understand the law through the statement that when the price of the commodity rises, the supply of goods also rises. However, if the price of a commodity decreases, then its supply also reduces.