Question

Contraction of supply is the result of :
(a) decrease in the number of producers
(b) decrease in the price of the good concerned
(c) increase in the prices of other goods
(d) decrease in the outlay of sellers

Answer 1

Answer:

Explanation:

Contraction of supply is the result of :

(c) increase in the prices of other goods

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Answer 2

Answer:

(b) decrease in the price of the good concern

Explanation:

Contraction of supply is the term used to describe when a decline in price of a commodity results in a reduction in the amount provided of that commodity.

A decline in the cost or volume of the good supplied is what causes contraction.

1. A commodity's supply contracts when its quantity is reduced solely as a result of a price decrease.
2. There has been a change in supply.
3. Supply agreements brought about by price drops alone.
4. When the n-curve is downhill.

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