Supply in economics refers to
A Stock of goods available
B Quantity producers wish to sell at different prices
C Quantity demanded at a price
D Total production of a firm
Supply means the quantity of a commodity that producers are willing and able to offer for sale at various prices during a given period of time.
Which of the following is an essential element of supply?
A Desire to sell
B Cost of production
C Willingness and ability to sell
D Demand for goods
Supply requires both willingness and ability to sell a commodity at a given price and time.
Supply is always expressed with reference to
A Income
B Cost
C Price and time
D Demand
Supply is defined at a particular price and for a specific period of time.
The law of supply states that
A Supply falls with rise in price
B Supply remains constant
C Supply rises with rise in price
D Supply is independent of price
According to the law of supply, other things remaining constant, quantity supplied increases when price rises.
The law of supply assumes
A Change in technology
B Constant cost of production
C Change in taxes
D Change in prices of inputs
The law of supply holds under ceteris paribus, assuming costs, technology, and other factors remain constant.
Which factor causes movement along the supply curve?
A Change in technology
B Change in input prices
C Change in price of the commodity
D Change in government policy
A change in the commodity’s own price causes expansion or contraction of supply, shown as movement along the curve.
An increase in supply due to fall in cost of production results in
A Upward movement along curve
B Downward movement along curve
C Rightward shift of supply curve
D Leftward shift of supply curve
Fall in cost increases supply at the same price, shifting the entire supply curve rightward.
Expansion of supply refers to
A Increase in supply due to price rise
B Increase in supply due to cost fall
C Rightward shift of supply curve
D Increase in production capacity
Expansion of supply occurs when quantity supplied increases due to rise in the commodity’s own price.
Contraction of supply is caused by
A Increase in technology
B Fall in price
C Increase in number of firms
D Fall in cost
Contraction of supply means reduction in quantity supplied due to fall in price.
A rightward shift of supply curve indicates
A Contraction of supply
B Decrease in supply
C Increase in supply
D Expansion of supply
Rightward shift shows increase in supply due to non-price factors.
Which of the following is NOT an assumption of the law of supply?
A Constant technology
B Constant input prices
C Constant income of consumers
D No change in government policy
Consumer income affects demand, not supply, and is not an assumption of law of supply.
The supply curve generally slopes upward because
A Cost of production increases
B Law of diminishing returns operates
C Profit motive of producers
D All of the above
Rising costs, diminishing returns, and profit motive together explain the upward slope of supply curve.
Which of the following explains the upward sloping supply curve?
A Income effect
B Substitution effect
C Law of diminishing returns
D Law of diminishing utility
As output increases, marginal cost rises due to diminishing returns, requiring higher prices.
Which is an exception to the law of supply?
A Agricultural goods
B Manufactured goods
C Labour supply
D Perishable goods
Labour supply may bend backward, violating the law of supply at higher wage levels.
Backward bending supply curve is associated with
A Capital goods
B Labour
C Land
D Consumer goods
Labour supply increases up to a point with wages, then decreases due to preference for leisure.
Supply of perishable goods in the short run is
A Perfectly elastic
B Perfectly inelastic
C Elastic
D Unitary elastic
Perishable goods must be sold immediately, so quantity supplied is fixed in short run.
Which situation causes supply to increase even at the same price?
A Fall in price
B Rise in input prices
C Technological improvement
D Increase in taxes
Better technology reduces cost, increasing supply at given price.
Which of the following is a determinant of supply?
A Consumer income
B Population
C Technology
D Taste
Technology directly affects cost and efficiency of production, influencing supply.
Increase in number of firms in an industry leads to
A Decrease in supply
B Increase in supply
C Contraction of supply
D No change in supply
More firms mean greater total output, increasing market supply.
Rise in price of inputs causes
A Increase in supply
B Expansion of supply
C Decrease in supply
D Rightward shift of supply curve
Higher input prices raise cost, reducing supply at given price.
Government subsidy generally results in
A Leftward shift of supply curve
B Rightward shift of supply curve
C Contraction of supply
D No change in supply
Subsidies lower production cost, encouraging producers to supply more.
Indirect taxes like GST affect supply by
A Increasing demand
B Reducing cost
C Increasing cost
D Improving technology
Indirect taxes increase cost of production, reducing supply.
Expectations of higher future prices will
A Increase current supply
B Decrease current supply
C Not affect supply
D Shift curve rightward
Producers may withhold supply expecting higher future prices.
Which factor shifts the supply curve leftward?
A Technological improvement
B Subsidy
C Increase in taxes
D Increase in number of firms
Higher taxes raise cost and reduce supply, shifting curve leftward.
Natural factors mainly affect supply of
A Industrial goods
B Agricultural goods
C Capital goods
D Luxury goods
Agriculture depends heavily on weather and natural conditions.
Supply schedule shows relationship between
A Price and demand
B Price and quantity supplied
C Cost and output
D Income and supply
Supply schedule tabulates quantities supplied at various prices.
Market supply is obtained by
A Vertical summation of individual supply curves
B Horizontal summation of individual supply curves
C Average of supply curves
D Demand summation
Market supply curve is horizontal sum of individual firms’ supply curves.
Which good may have perfectly inelastic supply in short run?
A Manufactured goods
B Agricultural produce already harvested
C Luxury goods
D Capital goods
Harvested crops cannot be increased immediately.
Which supply curve represents perfectly elastic supply?
A Vertical line
B Downward sloping line
C Horizontal line
D Backward bending curve
Perfectly elastic supply is shown by horizontal line.
Which supply curve shows perfectly inelastic supply?
A Horizontal
B Vertical
C Downward sloping
D Upward sloping
Vertical line shows fixed quantity regardless of price.
Law of supply fails in case of
A Manufactured goods
B Seasonal goods
C Perishable goods
D Labour supply
Labour supply may decrease with higher wages due to leisure preference.
Which factor causes increase in supply without price change?
A Fall in demand
B Rise in income
C Improvement in technology
D Rise in price
Technological progress reduces cost, increasing supply.
A fall in excise duty on a commodity will
A Decrease supply
B Increase supply
C Not affect supply
D Shift curve left
Lower taxes reduce cost, encouraging higher production.
Supply curve slopes upward mainly due to
A Increasing returns
B Law of diminishing returns
C Constant returns
D Law of demand
Diminishing returns increase marginal cost at higher output.
Which is NOT a determinant of supply?
A Price of commodity
B Technology
C Consumer income
D Input prices
Consumer income affects demand, not supply.
Increase in wages paid to labour will
A Increase supply
B Reduce supply
C Not affect supply
D Increase demand
Higher wages increase cost of production, reducing supply.
Supply curve shifts right when
A Cost rises
B Technology improves
C Taxes increase
D Firms exit industry
Better technology lowers cost and increases supply.
Short-run supply curve of a firm is
A Average cost curve
B Average variable cost curve above AVC
C Marginal cost curve above AVC
D Total cost curve
Firm supplies output where price ≥ AVC, so MC above AVC is supply curve.
Which factor explains positive relation between price and supply?
A Demand
B Profit motive
C Consumer taste
D Income effect
Higher prices increase profits, encouraging more supply.
A leftward shift of supply curve shows
A Expansion of supply
B Increase in supply
C Decrease in supply
D Contraction of supply
Leftward shift reflects decrease in supply due to non-price factors.
Supply of goods depends directly on
A Consumer preference
B Cost of production
C Utility
D Income elasticity
Cost influences profitability and supply decisions.
Which market condition ensures uniform price for suppliers?
A Monopoly
B Perfect competition
C Oligopoly
D Monopolistic competition
Perfect competition ensures single market price.
If price remains constant but supply increases, the curve will
A Shift right
B Shift left
C Move upward
D Move downward
Increase in supply due to non-price factors shifts curve right.
Which of the following affects supply in long run?
A Fixed factors
B Technology
C Consumer income
D Demand
In long run, technology changes significantly affect supply.
Supply of land is generally
A Elastic
B Perfectly elastic
C Perfectly inelastic
D Unitary elastic
Total land area is fixed, making supply perfectly inelastic.
Which factor causes backward bending labour supply?
A Income effect
B Substitution effect
C Both effects
D Cost effect
At high wages, income effect outweighs substitution effect.
Increase in profit margin encourages
A Decrease in supply
B No change in supply
C Increase in supply
D Shift left
Higher profitability motivates producers to supply more.
Supply curve of firm in perfect competition is based on
A MC and MR
B AC and AR
C MC and AVC
D TC and TR
Firm supplies output where MC ≥ AVC.
Supply curve indicates
A Maximum price consumer will pay
B Minimum price producer will accept
C Equilibrium price
D Demand conditions
Supply curve shows minimum acceptable price for each quantity.
Supply analysis mainly studies behaviour of
A Consumers
B Government
C Producers
D Traders
Supply theory explains producers’ response to price changes.