As the price of a commodity decreases, what happens to supply?
A)If the price decreases, then the supply will increases.
B)If the price decreases, then the supply will remain constant.
C)If the price decreases, then the supply will decreases.

Question

As the price of a commodity decreases, what happens to supply? ​
A)If the price decreases, then the supply will increases.
B)If the price decreases, then the supply will remain constant.
C)If the price decreases, then the supply will decreases.

Quizplus · Accepted Answer

When the price of a commodity decreases, producers are less incentivized to supply the market with that commodity, leading to a decrease in supply.

As the Price of a Commodity Decreases, What Happens to Supply