ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A
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B
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C
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D
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Detailed explanation-1: -All other things unchanged, the law of demand holds that, for virtually all goods and services, a higher price leads to a reduction in quantity demanded and a lower price leads to an increase in quantity demanded.
Detailed explanation-2: -Increase in price leads to increase in quantity supplied of a commodity. It does not lead to a shift in supply curve. Shift in supply curve is related to determinants, other than own price of the commodity.
Detailed explanation-3: -As seen above, the only factor that does not cause a shift of the supply curve is the change in the price of the good/service. This is because a change in the price of the product/service will cause a movement along the supply curve.
Detailed explanation-4: -Which of the following best describes the law of supply? The correct answer is: a. An increase or decrease in the price of a good will increase or decrease the amount producers are willing and able to produce and sell.