When does the producer increase the supply of a good at given price, give two reasons?
Answers
Answer:
It can happen under certain circumstances such as :
Explanation:
a) When the producer himself becomes a price taker. That is due to severe competetion in the market the buyers no longer remain the price takers. Instead due to market conditions and variety of sellers with variety of different and better prices the sellers and thereby the producer become a price taker. When he becomes a price taker he has to withstand the condition of buyers and supply good the increase of good at the same price.
B) When the market is getting higher in competetion and in order have the leading edge and attract the consumers to his/her product a producer increases the supply of a good for the same price but in some and more cases by diluting the quality of the good.
Answer:
The supply of a good increase at the given price because - (1)due to increasing of production of good and (2)downing price of good in market.