Respuesta :
The law of supply states that as the price of a good rises; the quantity supplied of that good increases.
According to the law of supply, an increase in price causes a corresponding increase in quantity of a commodity, while a decrease in price will case a decrease in the quantity being supplied.
Further Explanation;
- Supply refers to the quantity of goods that suppliers are willing and able to supply to the market at a particular price.
- Supply together with demand determine the prevailing market price of any given commodity. If the market price increases it means the supplier will be willing to supply more to the market so as to acquire bigger profits.
Law of Supply
- According to the law of supply, an increase in price of a good or a service results to an increase in the quantity of goods or services that suppliers are willing to supply.
- Conversely, a decrease in price on the other hand will result to low supply of quantity of goods and services by the suppliers.
- For example, a manufacture would supply more beer if the prices of these beer increases as far as other factors are kept constant.
- The law of supply applies when all other factors such as inelastic goods, are held constant.
Price determination
- Market price is determined by the forces of demand and supply that is based on the ability and willingness of buyers and sellers to undertake selling and buying.
- Buying and selling occurs at an equilibrium price that is agreed upon by sellers and buyers.
Keywords: Supply, law of supply, Quantity of goods supplied, price of goods.
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Level; High school
Subject: Business
Topic: Demand and supply
Sub-topic: Law of supply
The law of supply states that as the price of a good rise, the quantity supplied of that good increases.
Further Explanation:
Law of Supply: According to the Law of supply, when the price of the goods increases, the quantity supplied of the goods will increase and when the price of the goods decreases, the quantity supplied of goods will decrease. The supply curve is upward sloping since the quantity supplied and prices are directly proportional.
The factors affecting the supply curve are:
• Improvements in technology
• Input prices
• Time
• Government Policy
• Expectations
• Size of the market
The quantity supplied of that good disappears: This option is incorrect.
When the price of a good rises, the quantity supplied of that good will not disappear; rather it will increase.
The quantity supplied of that good decreases: This option is incorrect.
When the price of a good rises, the quantity supplied of that good will not decrease. If it will decrease the supplier will not be able to earn the profit.
The quantity supplied of that good remains the same: This option is incorrect.
When the price of a good rises, the quantity supplied of that good will not remain the same because the supplier will increase the supply in order to earn more profit.
The quantity supplied of that good increases: This option is correct.
When the price of a good rises, the quantity supplied of that good will increase, the supplier will in order to earn more increase the supply of the good in the market.
Learn more:
1. Law of demand and supply
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2. Effect on demand
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3. Demand and Supply
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Answer details:
Grade: High School
Subject: Economics
Chapter: Law of Supply
Keywords: the law of supply, price of the goods increases, the quantity supplied of that good, disappears, decrease, remain the same, increase, states that, economics, increase the supply, earn more profit.
