The law of supply states that an increase in the price of a good ?
Correct answer: B. increases the quantity supplied of that good
- A. none of these answers
- B. increases the quantity supplied of that good
- C. increase the supply of that good
- D. decrease the demand for the good
- E. decrease the quantity demanded for that good
Explanation
The law of supply describes movement along the supply curve: when price rises, producers generally offer a greater quantity for sale, all other factors held constant. This is an increase in quantity supplied, not a shift in supply.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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