Question

State and explain the law of supply. What are the assumptions to this law? (Answer in detail)

Answer 1

SUPPLY :

Supply is the quantity of certain goods or services which are provided by the desired suppliers to the market. 

THE LAW OF SUPPLY -

This is a direct relationship between the prices of goods and it's supply . If the price of the goods rise then their supply will also rise . In other words , The higher the price , The higher the quantity supplied.

ASSUMPTIONS -

There is No change in the goals of the firm .

There is. No change in the price of factors of production.

There is No change in state of technology .

There is No change in Taxation policy.

There's No change in price of other goods .