Exceptions of the law supply.

Every law has its own limitations and exceptions. Hence the law of supply of is not free from this general rule. In certain occasions, the law of supply does not work properly.

These exceptions are explained below:-

(i) Rare Goods: The law of supply does not operate in case of extremely scarce and mare commodities like the painting of big artist or rare art &  literature which cannot be reproduced. The supply of these goods is strictly limited. Hence whatever may be the price, more cannot be supplied.

(ii) Labor supply: The law of supply is partially applicable in case of labor supply. When wage rate rises and reaches a certain critical limit, supply of labor does not increase after that level. Instead in begins to falls wage rate rises. This is because laborers prefer lesure in place of work after wage rate reaches the critical level.

(iii) Auction sale: The law of supply does not operate in case of auction sale. Generally the highest bidder purchase the good meant for auction. Here only a limited quantity is offered for auction sale.

(iv) Need for case: When the seller the seller needs cash immediately, he supplies more even at lower price. Generally the seller sells more at lower price to a customer who is prepared to purchase a bulk of commodities.

(v) Change in non-price Determinants: The law of supply does not work if non-price determinants of supply like technique of production, expectation of future prices of related goods, factor prices undergo a change.