ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Many producers who make cars also produce motorcycles. If the price of motorcycles increases, what happens to the market for cars? Movement along a supply curve because of a price change.

Detailed explanation-2: -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-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: -Supply is generally considered to slope upward: as the price rises, suppliers are willing to produce more. Demand is generally considered to slope downward: at higher prices, consumers buy less.

Detailed explanation-5: -The relationship between supply and demand is indirect, meaning that when supply increases, prices decrease and demand increases. When supply reduces, prices rise and demand goes down.