ECONOMICS
TECHNOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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They have no significant overall effect on producer behavior.
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They are an incentive for producers to produce more.
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They are an incentive for producers to buy less.
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They encourage producers to modify their supply schedules.
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Detailed explanation-1: -Which of these best describes the influence of high prices on the behavior of producers? High prices are an incentive for producers to produce more.
Detailed explanation-2: -Key Takeaways. The law of supply says that a higher price will induce producers to supply a higher quantity to the market. Because businesses seek to increase revenue, when they expect to receive a higher price for something, they will produce more of it.
Detailed explanation-3: -Supply is the amount of a product offered for sale at all possible prices in a market. The Law of Supply states that more product will be offered for sale at higher prices than at lower prices.
Detailed explanation-4: -Companies incur two types of production costs: variable and fixed costs. Variable costs change based on the amount of output produced. Variable costs may include labor, commissions, and raw materials. Fixed costs remain the same regardless of production output.
Detailed explanation-5: -When the product price increases, producers will have a higher incentive to produce more goods and services. This will lead to an increase in the supply of the good in question.