Question

Extension of supply occurs due to change in

Answer 1

Answer:

The extension and contraction of supply take place in the same supply curve. A fall in input price will reduce the costs and permit supply at a lower price. b) State of Technology: Improvement in technology reduces the cost of production and increases the supply. ... Granting subsidies will increase supply.

Answer 2

Explanation:

Extension in supply refers to the increase in quantity supplied due to the increase in prices whereas contraction in supply refers to the decrease in quantity supplied due to the decrease in prices. A movement along a supply curve only occurs when the price changes, ceteris paribus.

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