A firm’s ‘supply’ is the quantity that it chooses to sell at a given price, given:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → technology and the prices of factors of production
A firm’s supply is the quantity it chooses to sell at a given price, with its technology and the prices of factors of production held fixed. These two decide its cost, and so its supply.
Consumers’ incomes and tastes act on the buyers’ side, that is, on demand.
NCERT (2026-27): “4.4 Supply Curve of a Firm A firm’s ‘supply’ is the quantity that it chooses to sell at a given price, given technology, and given the prices of factors of production. A table describing the quantities sold by a firm at various prices, technology and prices of factors remaining unchanged, is called a supply schedule. We may also represent the information as a graph, called a supply curve. The supply curve of a firm shows the levels of output (plotted on the x-axis) that the firm chooses to produce corresponding to different values of the market price (plotted on the y-axis), again keeping technology and prices of factors of production unchanged. We distinguish between the short run supply curve and the long run supply curve.” |