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Q.

Assertion: An increase in the price of goods leads to an increase in the supply of goods.
Reasoning: Producers are motivated to increase production to earn higher profits.

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a

Both Assertion and Reasoning are true, and Reasoning is the correct explanation for Assertion

b

Both Assertion and Reasoning are true, but Reasoning is not the correct explanation for Assertion

c

Assertion is true, but Reasoning is false

d

Assertion is false, but Reasoning is true

answer is B.

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Detailed Solution

An increase in the price of goods does not always lead to an increase in supply. The producers may face constraints in terms of the availability of inputs, technology, and production capacity. Therefore, the reasoning is not the correct explanation for the assertion.

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