A supply curve typically slopes upward because _____

Question

Quizplus · Accepted Answer

The supply curve typically slopes upward because as quantity supplied increases, the opportunity cost of production also increases - this is due to the law of diminishing returns, which means that as more resources are devoted to production, the marginal cost of producing additional units increases. This results in firms requiring a higher price in order to justify increasing production beyond a certain point, and thus the supply curve slopes upward.

A Supply Curve Typically Slopes Upward Because _____