SSC
GENERAL ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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As the price of a good rises in a market, it acts as a signal:
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consumers that they should buy a greater quantity of the good.
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to producers that they should supply a greater quantity of the good.
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to consumer that they should increase their demand for the good.
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to producers that they should increase their supply of the good.
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Explanation:
Detailed explanation-1: -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-2: -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.
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