State whether the following statement are TRUE and FALSE. Chapter 5 - Producer's Behaviour Economics Solutions for Class 12 Commerce Economics

State whether the following statement are TRUE and FALSE.

i. If price falls, the supply curve will shift to left.

ANSWER:


i) If price falls, the supply curve will shift to left. - False

Explanation:
The above statement is incorrect. Other things remaining constant, a fall in price leads to a fall in supply. Such a fall in supply is known as contraction in supply. It is shown by a downward movement along the same supply curve. On the other hand, a parallel leftward shift of the supply curve represents that the supply falls as a result of change in factors other than price.

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