An Exception of The Law of Supply

The law of supply is not applicable to every ware under particular circumstances. These are called an exception of the law of supply, these are followed.

• When a producer is leaving an industry.
• The expectation of fall and rise in price in the future.
• A seller needs cash.
• Agriculture output/ perishable.

When a producer is leaving an industry

If the producer is leaving a particular industry, he does not care to change a price that covers his cost of production. In such a case, the seller may be preparing to sell more at a lower price for stock clearance.

The expectation of fall and rise in price in the future

If the producer in an industry expects the price of the product to fall in the future, he would be increased to sell their present stock even at the price slightly lower than the current prices this is because they would like to avoid heavy loss in a feature.

A seller needs cash

If the seller is hard-pressed for cash, he will like to sell his stock even at the price which is lower than the price he can obtain. If he is preparing to wait, he may lower the price still future if he finds full purchases.

Agriculture output/perishable

The supply of agriculture commodities depends more on nature and technical factors than on price. In a particular season, the supply of agriculture products may go down even when its price has gone up.