Why does quantity supplied increase when price increases?
A)Producers find it more profitable to make the item.
B)People "drop out" of the market, so buyers find it more abundant.
C)As demand decreases with a high price, surpluses appear.
D)All of the above.

Question

Quizplus · Accepted Answer

When the price of a good or service increases, producers are incentivized to produce more of it because they can make more profit per unit sold. As such, the quantity supplied increases as producers try to capitalize on the higher price. This is the basis of the law of supply, which states that as the price of a good or service increases, the quantity supplied increases as well.

Why Does Quantity Supplied Increase When Price Increases