ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What Is the Law of Supply? The law of supply is the microeconomic law that states that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer will increase, and vice versa.

Detailed explanation-2: -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-3: -An increase in supply, all other things unchanged, will cause the equilibrium price to fall; quantity demanded will increase. A decrease in supply will cause the equilibrium price to rise; quantity demanded will decrease.

Detailed explanation-4: -The law of supply states that an increase in the price of goods or services results in an increase in the quantity that suppliers make available to the market. Existing suppliers increase production of higher-priced goods to maximize profits, while new suppliers may also enter the market.

Detailed explanation-5: -The law of supply says that when prices rise, companies see more profit potential and increase the supply of goods and services. The law of demand states that as prices rise, customers buy less. Theoretically, a free market will move toward an equilibrium quantity and price where supply and demand intersect.