ABNORMAL SUPPLY

 EXCEPTION TO THE LAW OF SUPPLY

Exceptional or Abnormal Supply: is the supply pattern which does not abide by the law of supply, and



therefore, gives rise to the reverse of the basic law of supply which states that the higher the price, the higher the quantity of commodity that will be supplied by the producer, and vice-versa. An abnormal supply also called a Regressive or Backward Sloping Supply Curve. Shows that at higher price, less quantity will be supplied. That is a negative situation in which a fall in the price of a commodity leads to an expansion of its supply.


Causes of abnormal supply are as itemized below:

👉Existence of some fixed assets whose prices increase without a  corresponding increase in its size, eg Land

👉Rising wages of labour where a worker tends increase his leisure time and reduce his productive working hours at high wage rate

👉A producer with a particular target income may go on supplying the market with his commodities even when prices fall.

👉Monopolistic practices where a producer may hold back supply even when the prices are rising, just to push the prices still higher up

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