GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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as price increases, supply increases
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as prices decrease, supply increases
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price increases, quantity demanded decreases
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as price decreases, quantity demanded decreases
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Detailed explanation-1: -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 law of supply states that the quantity of a good supplied (i.e., the amount owners or producers offer for sale) rises as the market price rises, and falls as the price falls. Conversely, the law of demand (see demand) says that the quantity of a good demanded falls as the price rises, and vice versa.
Detailed explanation-3: -The law of supply Law of supply states: As price of a good increases, the quantity supplied of the good rises, and as the price of a good decreases, the quantity supplied of the good falls, ceteris paribus. Restated: there is a direct relationship between price (P) and quantity supplied (Qs).
Detailed explanation-4: -If prices rise, additional suppliers will be enticed to enter the market. Supply will increase until a market-clearing price is reached again. If prices fall, suppliers who are unable to cover their costs will drop out.
Detailed explanation-5: -Understanding Change in Supply An increase in the change in supply shifts the supply curve to the right, while a decrease in the change in supply shifts the supply curve left. Essentially, there is an increase or decrease in the quantity supplied that is paired with a higher or lower supply price.