Final answer:
The law of supply states that when the price of a good or service goes down, the quantity supplied goes up. This is because producers are motivated to supply more of the good or service to take advantage of higher profit margins.
Step-by-step explanation:
The law of supply states that when the price of a good or service goes down, the quantity supplied of that good or service goes up. This is because as the price decreases, producers are motivated to supply more of the good or service to take advantage of the higher profit margins. For example, if the price of tomatoes decreases, farmers may decide to grow and supply more tomatoes to the market.
The law of supply is based on the principle that all other variables are held constant. This means that factors such as production costs, technology, and input prices remain unchanged. In reality, however, these variables can influence supply and may cause it to deviate from the directly proportional relationship described by the law of supply.
In conclusion, the statement 'According to the law of supply, when the price goes down, the quantity supplied goes up' is True.