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Change in the supply due to changes in price .

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Step 1. To determine the change in supply due to changes in price, we need to understand the concept of equilibrium, surplus, and shortage in the market caused by different price levels. Step 2. In Figure -1, the horizontal axis measures quantity while the vertical axis measures price. The curved lines labeled D and S represent the demand and supply curves respectively. The point where these curves intersect represents the equilibrium point. Step 3. When the demand and supply curves intersect at the equilibrium point, it means that the quantity demanded is equal to the quantity supplied at that particular price level. Step 4. Option (b) states that when other factors remain constant, an increase in price leads to an increase in the quantity supplied, and vice versa. Step 5. Therefore, if the price increases, the quantity supplied will also increase, and if the price decreases, the quantity supplied will decrease. This reflects the positive relationship between price and quantity supplied. Step 6. Conversely, if the price decreases, the quantity supplied will also decrease, and if the price increases, the quantity supplied will increase. This demonstrates the inverse relationship between price and quantity supplied. Step 7. By understanding the relationship between price and quantity supplied, we can determine how changes in price will affect the supply in the market.
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Question Text
Change in the supply due to changes in price .
TopicAll Topics
SubjectEconomics
ClassGrade 10
Answer TypeText solution:1