ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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According to the law of supply, what happens as price increases?
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The quantity supplied increases
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The quantity supplied decreases
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The supply curve shifts to the left
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The supply curve shifts to the right
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Explanation:
Detailed explanation-1: -The law of supply states that there is a direct relationship between price and quantity supplied. In other words, when the price increases the quantity supplied also increases.
Detailed explanation-2: -With a rise in price, the tendency is to increase supply because there is now more profit to be earned. On the other hand, when prices fall, producers tend to decrease production due to the reduced economic opportunity for profit.
Detailed explanation-3: -Supply Increase: price decreases, quantity increases. Supply Decrease: price increases, quantity decreases.
Detailed explanation-4: -An increase in supply shifts the supply curve rightward. 2. The price falls to restore market equilibrium.
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