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: -Answer: d. An increase in market price will lead to an increase in quantity supplied. When all else is constant, the law of supply states that the price and the quantity supplied have a direct relationship. If the market price of the output increases, the quantity supplied also increases.
Detailed explanation-2: -The law of supply states that ceteris paribus, the quantity supplied for a good or service is directly related to its price. Hence, a decrease in the price of a product leads to a decrease in its quantity supplied. Similarly, an increase in the price of a product leads to an increase in its quantity supplied.
Detailed explanation-3: -The correct option is c. As the price of a good or service rises, the quantity supplied will increase. Everything else held constant; the law of supply states that as the price of a good increases, the number of goods supplied increases.
Detailed explanation-4: -Which statement is not consistent with the law of supply? Quantity supplied of a good is inversely related to the good’s price. If supply and demand both shift to the right, equilibrium quantity: rises, but the equilibrium price may rise, fall, or stay the same.