Exceptions of the Law of Supply

There are some exceptions of the law of supply, which are as follows:

I) Expectations Regarding Future Price :

When the price is expected to fall , seller sells more quantity of the commodity to clear their stocks. On the other hand, when the price is expected to rise in future, seller sells less at higher price in present time.

II) Change in Other Factors :

The supply of a commodity may also be affected by the change in habit, taste, fashion, weather, etc.

III) Agricultural Goods:

The supply of agricultural goods depends more on natural factors rather than their prices.

IV) Perishable Goods :

Seller wants to sell more units of perishable goods even at a lower price because the seller cannot hold them.

V) Auction Sell :

When a firm wants to sell its old stock, it sells through auction sell. In this case, seller sales more goods at a lower price in order to clear off old stock.

Chapter 2 Part  13