| Home> Class-12> Economics >Q 76 |
|---|
Que : 76. Write the effecting factors of commodity of supply. |
Answer: i) Price of the commodity - price of a commodity is directly related to the supply It means, as price increases, the quantity supplied of the given commodity also rises and vice-versa. ii) Prices of other goods - As resources have alternative uses, the quantity supplied of a commodity depends not only on its price, but also on the prices of the commodities. Increase in the price of other goods make them more profitable in comparision to the given commodity. iii) Prices of the factors of production - prices of the factors of production or inputs used in the process of production constitute the cost of production of the commodity. iv)State of technology - technological changes influence the supply of a commodity. Adveanced and improved technology reduces the cost of production ,which raises the profit margin. v) Government policies - Increase in taxes raises the cost of production and thus, reduces the supply, due to lower profit margin. |
