ECONOMICS
TECHNOLOGY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The law of increasing costs.
|
|
|
The law of diminishing returns.
|
|
|
The law of supply.
|
|
|
The law of demand
|
Detailed explanation-1: -What Is the Law of Supply? The law of supply is the microeconomic law that states that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer will increase, and vice versa.
Detailed explanation-2: -The relationship between price and quantity supplied is a direct relationship. Economists refer to this relationship as the law of supply. When the price of a good rises, the quantity supplied of that good will increase.
Detailed explanation-3: -The law of supply and demand predicts that if the supply of goods or services outstrips demand, prices will fall. If demand exceeds supply, prices will rise. In a free market, the equilibrium price is the price at which the supply exactly matches the demand.
Detailed explanation-4: -Equilibrium is the economic condition where market demand and market supply are equal to each other, which ultimately brings stability in the price levels. Normally, when the supply of goods and services exceeds over time, it causes a decline in price, that ultimately, generates more demand.
Detailed explanation-5: -According to basic economic theory, the supply of a good will increase when its price rises. Conversely, the supply of a good will decrease when its price decreases. There’s also price elasticity of demand. This measures how responsive the quantity demanded is affected by a price change.