The law of supply indicates that (all other factors remaining constant) supply will move in the same direction as price. This means that the supply of coals will drop.
Modifiers to the Law of Supply
According to the principles of economics, there are some exceptions to the Law of Supply. They are:
- Monopoly: A monopolistic market is a market where there is only one seller of the goods or service, or where there is no close substitute. In such a market, the seller can decide their price.
- Competition: In the perfect market structure, suppliers may elect to sell at a lower price in order to gain more customers.
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