Question

Expansion of supply: price rises::contraction of supply:

Answer 1

Answer:

Expansion of supply, like that of demand, refers to a movement along the supply curve in response to changes in price. A rise in price, other things remaining same, leads to a rise in supply. Refer to Figure 2.22(a).

Increase in supply refers to a downward to right shift in the supply curve resulting from a favourable change in one of the shift factors. The shift factors, here, are all the determinants of supply except the price of the product offered by the market.

Answer 2

Answer:

price decreases..............