The fundamental reason why most supply curves are upward sloping is that Group of answer choices a higher price never reduces quantity supplied by enough to lower total revenue and so higher production is motivated. consumers substitute lower-priced goods for higher-priced goods. the quantity supplied increases as more firms enter the market. higher production raises the opportunity costs of production and so price must rise to induce more output.

Question

Talan Santos

Business

17 March, 02:10

The fundamental reason why most supply curves are upward sloping is that Group of answer choices a higher price never reduces quantity supplied by enough to lower total revenue and so higher production is motivated. consumers substitute lower-priced goods for higher-priced goods. the quantity supplied increases as more firms enter the market. higher production raises the opportunity costs of production and so price must rise to induce more output.

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Answers (1)

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Scarlett Huff · Answer 1

The answer is: the quantity supplied increases as more firms enter the market.

Explanation:

As the price of a product increases, suppliers / existing and new suppliers) are willing to offer a larger quantity of that product. But if the price of a product decreases, suppliers will be willing to offer smaller quantities of that product. (Law of Supply).

For example, if the price of new cars was at least $1,000,000 per car, all the car manufacturers will be willing to produce cars at full capacity. But if they can only sell cars at $15,000 or less, only the smallest and cheapest cars will be sold, and the factories that build larger and more expensive cars will close.