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. This is represented by an upward sloping line from left to right.

Detailed explanation-2: -With a rise in price, the tendency is to increase supply because there is now more profit to be earned. On the other hand, when prices fall, producers tend to decrease production due to the reduced economic opportunity for profit.

Detailed explanation-3: -The supply curve will move upward from left to right, which expresses the law of supply: As the price of a given commodity increases, the quantity supplied increases (all else being equal).

Detailed explanation-4: -Economists call this positive relationship between price and quantity supplied-that a higher price leads to a higher quantity supplied and a lower price leads to a lower quantity supplied-the law of supply. The law of supply assumes that all other variables that affect supply are held constant.

Detailed explanation-5: -The correct option is: (c) A change in the market price of the good . There is only a single determinant that is responsible for the change in the quantity supplied and that is the market price.