Other things remaining constant, the market supply for a good increases if 1. its price increases. 2. price of its factors of production decreases. 3. price of other goods decreases. Select the correct answer using the codes given below.

CDS 2023 PYQ with Answer — Other things remaining constant, the market supply for a good increas…

2023 · Q68

Other things remaining constant, the market supply for a good increases if

1its price increases.
2price of its factors of production decreases.
3price of other goods decreases.

Select the correct answer using the codes given below.

General KnowledgeIndian Economy

A1 and 2 only
B1 and 3 only
C2 and 3 only
D1, 2 and 3

Explanation

Market supply increases, i.e., the supply curve shifts right, when the price of factors of production decreases (2) or when the price of other goods decreases, making this good relatively more profitable to produce (3). A rise in the good's own price (1) causes a movement along the supply curve, not an increase in supply. Hence 2 and 3 only.