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JAMB Economics 1979 Question 5

Question 5

Theory of Supply

One of the reasons why the conditions of supply of a commodity may change is

  1. A.a change in real income
  2. B.changes in the technique of production
  3. C.a change of fashion or taste
  4. D.changes in the price of the commodity itself
  5. E.changes in population.
Show the answer and explanation

Answer: B (changes in the technique of production)

Explanation

A new production technique changes costs and so shifts the supply curve; income, taste and population affect demand, and the good's own price only moves along the curve.