Which statement best explains the law of supply?

A. The quantity supplied by producers increases as prices rise and decreases as prices fall.

B. The quantity supplied by producers decreases as prices rise and increases as prices fall.

C. The quantity supplied by consumers increases as prices rise and decreases as prices fall.

D. The quantity supplied by consumers decreases as prices rise and increases as prices fall.

Thank you

Supply means the amount of product or services that a producer willing to supply at a certain price. In the market, supply and demand always shift until the market finds the equilibrium price. Equilibrium is the condition when demand meets supply and the price stabilize. There are multiple factors that can affect both supply and demand. These factors included consumer preferences, product substitutes, the price of the complementary product, production cost, supply chain and the number of competitors.

The law of supply is the fundamental stated when the price of goods increases, so the supply will increase too because by selling at a higher price will increase revenue. On the other hand, the law of demand explains when the price goes up, people will less likely to buy the product, it means that the demand will decreases. In other words, the higher the price, the lower the quantity demanded.

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adeoladokun31 adeoladokun31 · Answer 2 · 2022-01-31T17:50:56+01:00

The quantity supplied by producers increases as prices rise and decreases as prices fall best explain the law of Supply.

What is Supply?

Supply is the amount of products or services the manufacturer is willing and able to supply to his consumers.

Demand and supply normally shifts in equilibrium.

Equilibrium is a state where supply and demand meets thereby causing a fixed price.

Factors that affect supply are price of complementary goods, quantity demanded, products substitute and so on.

What is the Law of Supply?

The law of supply is a principle in economics which states all other factors been constant, an increase in price will lead keeping other increase in quantity of product supplied.

There is relationship between price and quantity.

Therefore, The quantity supplied by producers increases as prices rise and decreases as prices fall best explain the law of Supply.

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