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18 Aug 2020
The law of supply states that other things equal, an increase in the price of a good, the quantity supplied of the good falls. Is this statement true or false?
The law of supply states that other things equal, an increase in the price of a good, the quantity supplied of the good falls. Is this statement true or false?
Vaishnavi KanukurtiLv10
1 Oct 2020
Related textbook solutions
Related questions
a. State the law of supply.
| Quantity supplied rises as price increases, other things are constant. Quantity supplied falls as price decreases, other things are constant. | |
| Supply increases as price falls. Supply decreases as price rises. | |
| Supply increases as price increases. Supply decreases as price decreases. | |
| Quantity supplied rises as price falls, other things constant. Quantity supplied falls as price increases, other things are constant. |
b. Why is price directly related to quantity supplied?
| As price rises, consumers substitute other goods whose price has not risen. | |
| As price rises, suppliers rearrange their activities to supply more of that good to take advantage of the higher price. | |
| As price falls, suppliers rearrange their activities to supply more of that good to take advantage of the lower price. | |
| As price rises, suppliers rearrange their activities to supply more of a substitute good to take advantage of the higher price. |
