ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Producers would make less of it.
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Producers would make more of it.
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Producers would increase the price even more.
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Producers would lower the price on similar items.
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Detailed explanation-1: -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-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: -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-4: -The law of supply and demand is based on two other economic laws: the law of supply and the law of demand. 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.
Detailed explanation-5: -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.