State with reasons whether you agree or disagree : There are many assumptions to the law of supply.

Answer: I agree with the statement.

The law of supply states that, other things being constant, the quantity supplied rises with a rise in price and falls with a fall in price. ‘Other things being constant’ implies the following assumptions:

1. Cost of production remains unchanged.
2. Technique of production remains the same.
3. No change in government policy regarding taxes, subsidies, etc.
4. Prices of other goods (and factors) remain constant.
5. No change in transport costs and infrastructure.
6. No change in weather conditions and natural factors.
7. Seller does not expect future changes in prices.

Since the law holds only under these many assumptions, the statement is correct.