Supply Analysis — Economics STD 12 Commerce / Arts — Question

1. Contraction of supply occurs when quantity supplied of a commodity falls due to a fall in price alone.
2. It is a case of variation in supply.
3. Supply contracts due to fall in price alone.
4. When there is a downward n curve.

Decrease in Supply

1. Decrease in supply occurs when less quantity is supplied at the same price.
2. It is a case of changes in supply.
3. Supply decreases due to –
   (1) increase in cost of production
   (2) transport strike
   (3) outdated technique
   (4) heavy taxes imposed by government.
   (5) more exports etc.
4. When there is curve shifts to curve.