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Limitations of the law of supply.
- Expectations about the future price
when the price rises and the seller expects
the future price to rise further,supply will
decline as the seller will be induced to
withhold the supplies so as to sell later and
earn larger profits.
- Agriculture output
law of supply will not apply in case of
agricultural commodities as their production
can not be increased at once following price
increases.
- factors other than price not remaining
constant.
Elasticity of supply