Question

Exceptions to the law of supply are only theoretical. Give reason.

Answer 1

• There are two categories of goods namely rare goods and perishable goods which do not follow the law of supply i.e. they are exceptions to the law of supply.
• In case of rare goods, the rare goods are not produced on a daily basis. Hence, it will be incorrect to consider these goods as exceptions to the law of supply.
• In case of perishable goods, even if the price of perishable products falls their supply will not contract because they cannot be preserved and hence must be sold.
• Hence, looking to situation that both these categories of goods experience it is said that exceptions to the law of supply are only theoretical.