A rise in the price of a good causes producers to supply more of the good. This statement illustrates

Question

Quizplus · Accepted Answer

This statement illustrates the law of supply, which states that as the price of a good increases, the quantity supplied by producers also increases. This is because producers are incentivized to increase their production in order to earn higher profits from the higher price of the good. The law of demand, on the other hand, states that as the price of a good increases, the quantity demanded by consumers decreases. A change in supply would refer to a shift in the entire supply curve due to factors such as changes in technology or input prices. The nature of an inferior good is unrelated to this statement, as inferior goods are those for which demand decreases as income increases.

A Rise in the Price of a Good Causes Producers