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Sandeep Garg Class 12 Microeconomics Chapter 9 Solutions

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Class 12 Microeconomics Sandeep Garg Solutions Chapter 9 – Supply

Students are provided with the concept of supply to understand it in detail and perform better during their examination. Sandeep Garg class 12 microeconomics solutions chapter 9 supply has a premium quality study material for the students that helps them to make sound preparation. Supply refers to the desired quantity of commodities that producers wish to sell. Class 12 microeconomics Sandeep Garg solution chapter explains that supply is related to the price and the time. This readymade guide of class 12 microeconomics solutions chapter 9 Sandeep Garg is a great resource to be followed for preparing notes and revision at the time of examination. 

Supply in economics means the quantity of commodity or service which can offer a sale and is willing to produce at a particular price in a given time frame. We get to know that supply depends upon factors like price and time. The higher the price, the more will be the quantity of commodity or service supplied by the producer, and lower the price, the less will be quantity supplied. This implies that there is a direct and positive relationship between price and quantity.

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Sandeep Garg Microeconomics Class 12 Solutions Chapter 9 – Supply

The Class 12 Sandeep Garg Solutions Supply Has the Following Important Points

  • Supply is mainly justified with the reference to price. It means as the price of the commodity will change the supply will also change. 

  • Supply is a flow variable like the demand. It means the amount or quantity the producers are willing to sell during a specified time like per week, per month, per year, etc. 


What is the Law of Supply?

Class 12 Sandeep Garg solutions supply explains the concept of the law of supply. It states that other things remaining the same, the quantity of any commodity or service a firm will produce and offer for sale will increase with an increase in price and decrease with a decrease in price. The other things that remain the same, refers to the factors that affect the market price of the commodity. The goal of the firm, price of the related commodity, input prices, the technology of productions and others. These factors are assumed to remain constant. This assumption is the base for the law of supply. 


What is the Price Elasticity of Supply?

In the law of supply we know in which direction the supply will change in response to the change in price. However, it doesn’t reveal the magnitude of change in supply. The price elasticity provides us with information with the magnitude of change in supply with a change in price. The Sandeep Garg class 12 microeconomics solutions chapter 9 state the importance of elasticity of supply. 

The price elasticity of supply measures the degree of responsiveness of the quantity supplied of a commodity to the change in its price. 

Es =Proportionate change in amount supplied/  Proportional change in price/price 


Definition of the Term Market Supply Schedule

The market supply schedule (MSS) of a good refers to a tabular system that shows various quantities of a commodity that all the firms are willing to supply at various levels of price during a specified time period, assuming that all factors other than the price of the commodity are given. The microeconomics class 12 chapter 9 Sandeep Garg explains that market supply schedule is a summation of all the individual supply schedules.  

Sandeep Garg Microeconomics Class 12 Solutions Chapter 9: Supply is one of the study materials that will help you learn more about Chapter 9 while also providing you with solutions to the questions you are looking for.


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Did You Know?

The market supply schedule (MSS) of a good refers to a tabular system that shows various quantities of a commodity that all the firms are willing to supply at various levels of price during a specified time period, assuming that all factors other than the price of the commodity are given. The microeconomics class 12 chapter 9 Sandeep Garg explains that market supply schedule is a summation of all the individual supply schedules.  

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FAQs on Sandeep Garg Class 12 Microeconomics Chapter 9 Solutions

1. How do I solve a numerical problem to calculate the price elasticity of supply using the percentage method?

To solve for the price elasticity of supply (E_s), you need to follow these steps:
1. First, calculate the percentage change in quantity supplied: (Change in Quantity ÷ Original Quantity) × 100.
2. Next, calculate the percentage change in price: (Change in Price ÷ Original Price) × 100.
3. Finally, divide the percentage change in quantity supplied by the percentage change in price. The formula is: E_s = (% Change in Quantity Supplied) / (% Change in Price). Remember to use the initial price and quantity as the base for your calculations.

2. What is the correct way to explain the difference between a 'shift in the supply curve' and a 'movement along the supply curve'?

A movement along the supply curve, also called a change in quantity supplied, is caused only by a change in the price of the commodity itself. An increase in price causes an upward movement (expansion), while a decrease in price causes a downward movement (contraction).
A shift in the supply curve, or a change in supply, is caused by changes in factors other than the commodity's own price, such as technology, input prices, or taxes. A rightward shift indicates an increase in supply, while a leftward shift indicates a decrease in supply.

3. How should I explain the effect of an improvement in technology on a firm's supply for a 3-mark question?

For a 3-mark question, you should structure your answer as follows:

  • Introduction: State that technological improvement is a key determinant of supply.
  • Explanation: Explain that advanced technology makes production more efficient, lowering the cost of production per unit.
  • Conclusion: Since it is now more profitable to produce at the same price, the producer increases output. This leads to an increase in supply, causing the supply curve to shift to the right.

4. How do I correctly draw a diagram to show an 'increase in supply'?

To correctly draw a diagram showing an 'increase in supply', you should:
1. Draw the initial supply curve, labeling it 'S', sloping upwards from left to right. Label the X-axis 'Quantity Supplied' and the Y-axis 'Price'.
2. Show an initial equilibrium point on the curve.
3. Draw a new supply curve to the right of the original curve and parallel to it. Label this new curve 'S1'.
4. Use an arrow to indicate the direction of the shift from S to S1. This rightward shift shows that more is supplied at each price level.

5. Why is the supply curve generally upward sloping? What is the economic logic behind it?

The supply curve slopes upwards because of the law of supply, which states that, other factors remaining constant, producers are willing to sell more of a good at a higher price. The key economic reason is profit motive. As the price of a good rises, it becomes more profitable for firms to produce and sell it. Higher prices cover the higher marginal costs of producing additional units, incentivising firms to increase their output.

6. If the cost of a key raw material for a product increases, but the government also provides a new subsidy, how do I determine the net effect on supply?

This is a higher-order thinking question where two factors change simultaneously. You need to analyse the impact of each:

  • An increase in raw material cost raises the cost of production, which tends to decrease supply (shift the curve left).
  • A new government subsidy lowers the cost of production, which tends to increase supply (shift the curve right).
The net effect depends on the magnitude of these two opposing forces. If the cost increase is greater than the subsidy's benefit, supply will decrease. If the subsidy outweighs the cost increase, supply will increase. If they are equal, supply may not change.

7. What is a common mistake students make when distinguishing between 'contraction in supply' and 'decrease in supply'?

The most common mistake is confusing the causes. A 'contraction in supply' is a movement down along the same supply curve and is caused *only* by a fall in the product's own price. A 'decrease in supply' is a backward or leftward shift of the entire supply curve, caused by factors other than price, like higher taxes, increased input costs, or outdated technology. Always link contraction to price change and decrease to other factors.

8. How do I solve a problem asking for market supply when individual supply schedules of two firms are given?

To find the market supply schedule, you simply perform a horizontal summation of the individual supply schedules. This means that for each price level, you add up the quantities supplied by each firm. For example, if at a price of ₹10, Firm A supplies 20 units and Firm B supplies 30 units, the market supply at ₹10 is 20 + 30 = 50 units. Repeat this addition for every price point given in the schedules to create the final market supply schedule.