Supply | assumption of supply |
1. Cost
of production:-
It is
assumed that the cost of production does not change because rise in price due
to increase in cost of production will not increase the quantity supply of a
product.
2.
Method of
production:-
It is
assumed that no change in technology or methods of production because due to
better technology, cost of production decrease and price or unit of product
will also decrease but quantity supply will not fall.
3. Change of
season:-
Supply
of agriculture products is affected by change of season. During harvesting season,
quantity offered for sale at different prices increase.
4. Political
situation:-
Political
situation remains stable, in case of political instability or political
disturbance, less quantity of a product will be produced even through prices
have not decrease.
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