According to the law of supply:

a. there is a direct relationship between price and the quantity supplied.

b. there is an inverse relationship between price and the quantity supplied.

c. there is a direct relationship between price and quantity demanded.

d. there is an inverse relationship between price and quantity demanded.

Question

Litzy

Business

21 April, 09:56

According to the law of supply:

a. there is a direct relationship between price and the quantity supplied.

b. there is an inverse relationship between price and the quantity supplied.

c. there is a direct relationship between price and quantity demanded.

d. there is an inverse relationship between price and quantity demanded.

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Answers (1)

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Diamond Stuart · Answer 1

a. there is a direct relationship between price and the quantity supplied.

Explanation:

Supply refers to the quantities of goods and services that suppliers are willing to sell in the markets at a specific price. The law of supply asserts that as price increases, suppliers will be willing to supply more products and services in the market. Producers or suppliers are business people; hence profit-motivated.

High prices imply suppliers will have bigger margins on products, which translates to profits. The supply curves illustrate the relationship between price and quantity supplied. The supply curve slopes upwards, showing how quantities supplied increase as prices rise.