Law of Supply with its exceptions/limitations/criticisms.
Law of Demand... It is another important theory in micro-economics. It is als the basis of consumption, production, exchange and distribution of goods and services. It was als introduced and developed by the neoclassical economist Alfred Marshall in his book "Principle of Economics" published in 1890 AD. This law is based on the functional relationship between price and quantity supplied of a particular commodity. According to this law, if other factors remaining the same, when price increases, quantity supplied of a particular commodity also increases and vice versa. In other words, quantity supplied of a commodity increases along with increase in price and vice versa, other factors remaining the same . It means there is direct relationship between price and quantity supplied of a particular commodity. Assumptions... The law of supply is based on several assumptions which may not be applicable in real life. They are as follows: 1. No change ...