For blind candidates in lieu of Q. No 14.

Examine the effect of (a) fall in the own price of good X and (b) rise in the tax rate on good X on the supply of a good. Use schedule.

A) The effect of a fall in own price of good X is explained in the following schedule:

● With the increase in price from Rs 10 to Rs 11, the supply reduces from 120 units to 110 units.

● The price further increases to Rs 12 and the supply reduces to 100 units.

● The price and supply are inversely proportionate to each other.

B) The effect of a rise in the tax rate on good X on the supply of a good. fall in own price of good X is explained in the following schedule:

● The price remains constant throughout.

● The rise in the tax rate on good X leads to a fall in the supply of good X from 120 units to 110 units.

● The tax rate and supply of a Good are inversely related