Q.Explain any three exceptions to the Law of Supply.

A few real situations see quantity supplied fail to move in the direction the Law of Supply predicts.

1. Goods with a fixed or rare supply. The supply of a rare antique, an original painting by a well-known artist, or a plot of land in a specific prime location cannot be increased however high its price rises — quantity supplied stays fixed regardless of price, giving a perfectly inelastic (vertical) supply curve.

2. Perishable goods facing distress sale. A seller of a highly perishable commodity (fresh vegetables, fish, milk) that cannot be stored may be forced to sell the ENTIRE available stock even at a falling price, rather than let it spoil unsold — quantity supplied does not fall even though price falls, contrary to the law. …

Confusing the backward-bending labour supply curve with a simple 'decrease in supply' (a leftward shift) — the backward bend is a single continuous curve where the SAME c …