In which field law of supply does not apply?

agricultural products

The correct answer is Option 2: agricultural products

The Law of Supply states that as the price of a good increases, the quantity supplied also increases, assuming all other factors remain constant. However, this law does not always apply to agricultural products due to the following reasons:

1️⃣ Time Lag in Production:

• Agricultural production depends on natural factors like weather, soil conditions, and crop cycles.
• Even if prices rise, farmers cannot immediately increase supply because crops take time to grow.

2️⃣ Limited Land Availability:

• Farmers cannot expand land to increase production beyond a certain limit, making supply inelastic.

3️⃣ Perishability:

• Agricultural products like fruits and vegetables are perishable, so excess production is not always possible.

4️⃣ Government Interventions:

• Price controls, subsidies, and regulations often impact agricultural supply, preventing a direct application of the Law of Supply.

Fast food and consumer goods have relatively flexible production processes, allowing for rapid adjustments to supply.

Raw products, while subject to resource constraints, can still be supplied in greater quantities when prices rise.