Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsEconomicsSupply Analysis4 Marks
Question
Reservation price is very low in respect of perishable commodities.
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Answer
Yes, I agree with this statement. ;
Reservation price is sellers minimum price, below which the seller will not supply any unit of the commodity.
Whether the sellers reservation price will be high or low depends upon number of factors. One of them is the durability of the commodity.
If the commodity is durable like TV set, car etc., then sellers reservation price will be high.
But if the commodity is perishable like fish, flowers, vegetables, milk etc., then reservation price will be low.
As perishable commodities cannot be stored for long, it can become stale and useless. Therefore, sellers are forced to clear stock as early as possible. So the reservation price is low.
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