Question

Q12. the "law of supply" refers to the fact that, all other things remaining the same, when the price of a good rises

a.the supply curve shifts leftward.
b.the supply curve shifts rightward.
c.there is a movement up along the supply curve to a larger quantity supplied.
d.there is a movement down along the supply curve to a smaller quantity supplied.

Answer 1

Supply is the amount of specific goods and services that are available in the market to the consumers. The law of supply states that a higher price leads to increase in the quantity being supplied by producers or suppliers and a lower price leads to a lower quantity supplied. In this case when price of goods rises while maintaining other things constant, there is a movement up along the supply curve to a larger quantity supplied.