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Extension of supply refers to the increase in quantity supplied of a commodity due to rise in price.

Supply increases when price remains constant. This can be due to the cheaper availability of input or technological improvements, which can reduce the cost of production or other such factors.

Contraction of supply refers to the decrease in quantity supplied of a commodity due to fall in price. .

Supply fall due to the changes in other factors, such as change in technology and change in input cost is known as Decrease in Supply.

It is the total of all costs equal to the sum of total fixed costs and total variable costs. 

Downward movement along the supply curve implies contraction of the quantity supplied and contraction of supply refers to the fall in supply due to fall in price of the commodity, when all the other factors of supply remain constant.

When the quantity supplied changes due to the change in price of the commodity, it is called Movement Along a Supply Curve of a good.

(b) decrease in the price of the good concerned

Yes. Factor ratio ought to change in case of law of variable proportions. It is precisely because the proportion of factors varies that the law is named as the law of variable proportions.

If one factor is increased keeping other factors constant, MPP initially increases with an increase in the employment of the input, then it diminishes and finally becomes negative.

Law of variable proportions states that as more and more of the variable factor is combined with the fixed factor, marginal product (MP) of the variable factor may initially increase and subsequently stabilise, but must finally decrease.

Factors which lead to an increase in supply are the following:

1. Changes in the goals of producers.
2. Fall in the price of other commodities.
3. Fair in the price of factors of production.

According to the law of supply, when the price of a commodity rises, its quantity supplied in the market increases, and when the price of a commodity falls, its quantity supplied decreases, other factors determining supply remaining the same. Thus, the quantity supplied of a commodity is directly or positively related to price. It is due to this direct relationship between price of a commodity and its quantity supplied that the supply curve of a commodity slopes upward to the right.

Correct answer is (a) zero

Correct answer is (b) infinite

Correct answer is (b) price

When the change in supply is more than proportionate to the change in price, it is the case of highly elastic supply.

Law of variable proportions operates because (i) factors of production are use-specific which compounds their scarcity, (ii) some factors are fixed and  (iii) factors of production cannot always be substituted for each other.

Supply is inelastic because the given price elasticity of supply is 0.8 which is less than 1.

Yes. Increasing MP implies TP is increasing at increasing rate. Diminishing MP implies that TP is increasing at diminishing rate. 

When MP remains constant at 10 units, and 10 units of the variable factor are used, TP = 10 + 10 + 10 + 10 + 10 = 50. 

(∴ TP = ∑MP)

No. Constant MP implies that TP is increasing at a constant rate.

When there is no change in quantity supplied in response to change in price, it is known as Perfectly Inelastic Supply or Zero Elasticity of Supply.

Price elasticity of supply is the measure of change in supply of a commodity due to change in its price. Law of supply tells us how the supply will change as a result of change in price; that is fall and increase in price will lead to contraction and extension of supply. But if we want to know how much supply will be increased compared to say 10 per cent increase in price, or which proportion change in the supply will occur, then we have to study the flexibility of supply. Thus, there is a proportional change in the supply after the proportional change in price elasticity in the supply.

No. AP and MP tend to be inverse ‘U-shaped’.

No. When MP is decreasing, TP increases at a diminishing rate.

(a) perfectly inelastic supply

Yes. As more and more units of a variable factor are combined with the fixed factor, the latter gets over utilised. Hence, the diminishing returns. 

Yes. It is because some factors are fixed that output is increased by using more and more units of the variable factor. It disturbs the ideal factor ratio and diminishing returns set in.

TP increases at diminishing rate when MP diminishes.

Leftward shift of the supply curve.

Perfectly elastic supply refers to a situation when a slight change in price causes infinite change in quantity supplied of a commodity. The supply curve is parallel to X-axis. Perfectly inelastic supply refers to a situation when the quantity supplied remains unchanged whatever be the price of the commodity. The supply curve is parallel to Y-axis. 

Diminishing returns to a factor occur when, due to increasing application of the variable factor, marginal product (MP) of the factor tends to diminish.

Joint supply refers to supply of goods produced and sold jointly like cotton and cotton seeds. 

Composite supply refers to supply of a commodity through its different sources. 

Increase in excise tax will shift the firm’s supply curve to the left.

Owing to improvement in technology, firm’s supply curve will shift to the right.

Two examples of technological progress causing a shift in supply curve are  (i) use of computers and  (ii) use of diesel engines in place of steam engines.

Price elasticity of supply is a percentage change in quantity supplied in response to a percentage change in price of the commodity.

The movement along the supply curve represents expansion and contraction of supply due to change in own price of the commodity. 

Shift in the supply occurs due to factors other than change in own price of the commodity. 

e_s = % change in quantity supply / % change in price 

1·5 = x% / 40% 

x% =1.5 x 40 = 60 

No. If elasticity of supply = 0, supply curve becomes a vertical straight line parallel to Y-axis.

Upward movement along a supply curve occurs because of rise in price of the commodity.

Yes. Flatter curve shows high elasticity of supply at the point of intersection of two supply curves. Because, corresponding to a given change in price at the point of intersection) flatter curve shows greater change in quantity.

No. When a straight line upward sloping supply curve shoots from the X-axis, E_s<1.

Monotypic genus: 

• If a genus has only one species, it is called a monotypic genus. 
• e.g. Ailurus fulgens (red panda)

Polytypic genus:

• If a genus has more than one species, it is called polytypic genus.
• e.g. Felis domestica Felis margarita

Generally, the money lenders and shroffs maintain the Sama Daskatni Khatavahi.

Correct option is (b) Thham Khatavahi

Correct option is (c) Shri Vigat Khatu

Generally, the money lenders and bankers in money lending business maintain such type of Khatavahi. In this Khatavahi, the ledger account of each customer who borrowed money is opened. In this account, the amount lent, Miti (date), day, rate of interest, details of the instalments to be paid, penalty on late payment of instalment, etc. and assets and documents kept as mortgaged or taran are recorded. As a proof of the amount lent, a revenue stamp is affixed and on the same the signature of the borrower is obtained. Since it bears the signature of the person who has borrowed money, it is known as Sama Daskatni Khatavahi.

Correct option is (a) equal