Which of the following is consistent with the law of supply ?
Correct answer: C. As the price of calculators rise, the quantity supplied of calculators increases, ceteris paribus.
- A. As the price of calculators rise, the quantity supplied of calculators decreases, ceteris paribus.
- B. As the price of calculators calls the supply of calculators increases, ceteris paribus.
- C. As the price of calculators rise, the quantity supplied of calculators increases, ceteris paribus.
- D. As the price of calculators rise, the supply of calculators increases ceteris paribus.
Explanation
The law of supply states that, other things equal, a higher price leads producers to offer a greater quantity for sale. This is an increase in quantity supplied, not necessarily an outward shift of 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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