ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Lower prices mean reduced supply, all else held equal. Higher prices give suppliers an incentive to supply more of the product or commodity, assuming their costs aren’t increasing as much. Lower prices result in a cost squeeze that curbs supply.

Detailed explanation-2: -Price is what the producer receives for selling one unit of a good or service. An increase in price almost always leads to an increase in the quantity supplied of that good or service, while a decrease in price will decrease the quantity supplied.

Detailed explanation-3: -If the price of a good falls, the quantity supplied of that good decreases. The relationship between the quantity supplied of a good and the price of the good when all other influences on selling plans remain the same. Supply a list of quantities at different prices and is illustrated by the supply curve.

Detailed explanation-4: -A decrease in demand will cause the equilibrium price to fall; quantity supplied will decrease. 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-5: -It’s a fundamental economic principle that when supply exceeds demand for a good or service, prices fall. When demand exceeds supply, prices tend to rise. There is an inverse relationship between the supply and prices of goods and services when demand is unchanged.