ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Consumers will pay more for a product if the supply of that product increases. A supply curve demonstrates the relationship between price and the quantity of a product supplied. As competition increases, businesses find greater opportunities for success.

Detailed explanation-2: -There is an inverse relationship between the supply and prices of goods and services when demand is unchanged. If there is an increase in supply for goods and services while demand remains the same, prices tend to fall to a lower equilibrium price and a higher equilibrium quantity of goods and services.

Detailed explanation-3: -An increase in supply, all other things unchanged, will cause the equilibrium price to fall; quantity demanded will increase. A decrease in supply will cause the equilibrium price to rise; quantity demanded will decrease.

Detailed explanation-4: -Scarcity refers to a limited supply of goods. That scarcity can then lead to high demand from consumers. According to the scarcity principle, the price of an item in low supply and high demand will steadily rise to meet the consumers’ expected demand.

Detailed explanation-5: -Expectations:-If consumers expect prices to increase in the future they increase their demand today.