ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -As the price of a good goes up, consumers demand less of it and more supply enters the market. If the price is too high, the supply will be greater than demand, and producers will be stuck with the excess. Conversely, as the price of a good goes down, consumers demand more of it and less supply enters the market.

Detailed explanation-2: -Key Takeaways. The law of supply says that a higher price will induce producers to supply a higher quantity to the market. Because businesses seek to increase revenue, when they expect to receive a higher price for something, they will produce more of it.

Detailed explanation-3: -The higher the price, the more suppliers are likely to produce. Conversely, buyers tend to purchase more of a product the lower its price. The equation that spells out the quantities consumers are willing to buy at each price is called the demand curve.

Detailed explanation-4: -Lower prices for goods or services provide incentives for buyers to purchase more of that good or service and for producers to make or sell less of it.

Detailed explanation-5: -Profit is the financial gain received by selling something for more than it cost to make it. Producers are motivated by the profits they expect to gain from the goods or services they offer. Their incentive to produce-the thing that motivates them-is the idea that consumers will want or need what they are offering.