ECONOMICS (CBSE/UGC NET)

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: -Price is what the producer receives for selling one unit of a good or service. An increase in price almost always leads to an increase in the quantity supplied of that good or service, while a decrease in price will decrease the quantity supplied.

Detailed explanation-3: -A change in the number of sellers in an industry changes the quantity available at each price and thus changes supply. An increase in the number of sellers supplying a good or service shifts the supply curve to the right; a reduction in the number of sellers shifts the supply curve to the left.

Detailed explanation-4: -When a firm’s profits increase, it is more motivated to produce output, since the more it produces the more profit it will earn. So, when costs of production fall, a firm will tend to supply a larger quantity at any given price for its output. This can be shown by the supply curve shifting to the right.