ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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increases
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decreases
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Either A or B
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None of the above
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Detailed explanation-1: -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-2: -Quantity Supplied Under Regular Market Conditions The supply curve is upward-sloping because producers are willing to supply more of a good at a higher price. The demand curve is downward-sloping because consumers demand less quantity of a good when the price increase.
Detailed explanation-3: -Supply Increase: price decreases, quantity increases. Supply Decrease: price increases, quantity decreases.