g The law of supply states that, other things equal, an increase in a. price causes quantity supplied to increase. b. price causes quantity supplied to decrease. c. quantity supplied causes price to increase. d. quantity supplied causes price to decrease.

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Kamila Koch

Business

18 April, 16:30

g The law of supply states that, other things equal, an increase in a. price causes quantity supplied to increase. b. price causes quantity supplied to decrease. c. quantity supplied causes price to increase. d. quantity supplied causes price to decrease.

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Answers (1)

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Rudy Shaw · Answer 1

a. price causes quantity supplied to increase.

Explanation:

The law of supply states that, other things equal, an increase in price causes quantity supplied to increase. An increase in price causes the supply curve to slope upward, thus, giving producers of goods and service providers, an incentive to supply more quantity of their products and vice-versa.

Also, the demand for goods and services has an effect on the quantity of goods and services provided by the producers or suppliers. Hence, an increase in the demand for a product would result in an increase in price, thereby causing the producers to supply more quantity in order to maximize profits.

For instance, an electronic gadget company will manufacture more television sets if the price of those television increases.