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Question
Distinguish between:
Extension of supply and Contraction of supply.
Extension of supply and Contraction of supply.
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Solution
Extension in supply: When the price of a commodity increases its quantity supplied also increases it is called the extension of supply.
Contraction in supply: The fall in the quantity supplied due to the fall in the price of the commodity is known as the contraction in supply.
Extension in supply: When the price of a commodity increases its quantity supplied also increases it is called the extension of supply.
Contraction in supply: The fall in the quantity supplied due to the fall in the price of the commodity is known as the contraction in supply.
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