ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-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: -If the cost of production is lower, the profits available at a given price will increase, and producers will produce more. With more produced at every price, the supply curve will shift to the right, meaning an increase in supply.

Detailed explanation-4: -The increase in price will cause the profits of producers to go up, motivating them to produce a greater quantity of the good. 3. As producers increase production, price will begin to fall, motivating consumers to purchase greater quantities of the good.

Detailed explanation-5: -If the price of a resource used to produce the product increases, this will increase the costs of production and the producer will no longer be willing to offer the same quantity at the same price.