The law of supply reflects the fact that

Question

Quizplus · Accepted Answer

The law of supply states that as the price of a good increases, the quantity supplied by suppliers also increases, ceteris paribus. This is because firms have an incentive to use their resources in the way that brings the biggest return, and higher prices mean higher profits. Therefore, option B is the correct answer. Option A is describing the law of demand, which states that people buy more of a good when its price falls. Option C is discussing the relationship between price and quality, which is not directly related to the law of supply. Option D is not always true, as some goods may have a higher demand at higher prices, but in general, the law of supply is based on the assumption that firms can sell more goods at higher prices. Option E refers to the law of demand, not the law of supply.

The Law of Supply Reflects the Fact That