How would we explain the situation when supply of a commodity increases without any increase in the price of a commodity ?
Answers
When apply for commodity increases without an increase in the price of a commodity it is known as the situation of increase in supply . Increase in supply of yours when quantity supply increases due to determinants other than the all price of the concerned community .
__________________________✌
Supply is what the seller is able and willing to offer for sale. The ability of a seller to supply a commodity depends on the stock available with him. Thus, stock is the determinant of supply. Supply is the amount of stock offered for sale at a given price. Therefore, stock is the basis of supply. Without stock supply is not possible.
2. Stock Determines the Actual Supply:
Actual supply is the stock or quantity actually offered for sale by the seller at a particular price during a certain period. The limit to maximum supply, at a time, is set by the given stock. Actual supply may be a part of the stock or the entire stock at the most. Thus, the stock can exceed supply but supply cannot exceed the given stock at a time.
3. Stock can be said as the Outcome of Production:
It is very common to understand that by increasing production as well as the potential supply, the stock can be increased. Sometimes, an increase in the actual supply can exceed the increase in current stock, when along with the fresh stock, old accumulated stock is also released for sale at the prevailing price.
In this way, supply can exceed the current stock, but it can never exceed the total stock (old + new stock taken together) during a given period.
Factors Affecting Supply:
There are a number of factors influencing the supply of a commodity. They are known as the determinants of supply.