Supply curves are usually assumed to slope upward because
A) profits fall as prices rise
B) a higher price leads to increases in demand
C) a higher price leads to decreases in demand
D) a higher price attracts resources from other less valued uses
E) firms drop out of the market as prices rise

Question

Quizplus · Accepted Answer

The higher price attracts resources from other less valued uses, in other words, it becomes more profitable for businesses to produce the good/service at a higher price, which leads to an increase in supply. This is the main reason why supply curves are usually upward sloping.

Supply Curves Are Usually Assumed to Slope Upward Because