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The theory of the firm under perfect competition — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsThe theory of the firm under perfect competition3 Marks
Question
Differentiate between increase in supply and expansion in supply [increase in quantity supplied).
✓

Answer

S. No.
Basis
Increase in Supply
Expansion in Supply
1.
Meaning 
An increase in supply means that producers now supply more at a given price level.
It states that rise in quantity supplied due to the rise in price of the commodity.
2.
Cause
(i) Fall in the price of remuneration of factors of production.
It is caused by rise in price of the commodity.
 
(ii) Fall in the prices of other goods
(iii) Improvement in technology.
(iv) Change in objective of producer (increase the supply at the same rate).
(v) Taxation policy of government falls.
3.
Schedule
Price
Supply
4
4
8
10
 
Price
Supply
1
2
8
10
 
4.
Diagram

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