Final answer:
True, the higher the price of a good or service, the more producers are willing to supply, according to the law of supply, which states that increased prices typically lead to a higher quantity supplied.
Step-by-step explanation:
The statement is true; producers are generally willing to supply a greater amount of a good or service at higher prices.
In economic terms, the relationship between the price of a good or service and the amount a producer is willing to supply is known as the law of supply. This principle states that, ceteris paribus (all other factors being equal), a higher price will typically result in a greater quantity supplied. The rationale behind this is clear: higher prices can lead to higher profits, which incentivize producers to increase production.
For instance, when gasoline prices rise, oil companies might invest in more exploration and development to produce more oil, which can then be refined into gasoline. This increase in supply is meant to capitalize on the higher prices and increased revenue potential. The law of supply is a fundamental concept in economics that helps explain producers' behavior in the market and predicts how changes in price influence the quantity of goods and services that producers are willing to bring to the market.