Q10 of 36 Page 1

Define market supply. Explain the factor ‘input prices’ that can cause a change in supply.

Market supply of a commodity means the various quantities of the commodity that the producers are willing to sell at different prices.

With the fall in the input price the marginal cost will decline and the producer will supply more of the commodity at the existing price. However when the input price will increase the marginal cost will rise and the producer will supply less at the existing price.


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