The tendency for the cost of producing additional output to decrease explains the law of supply.

Question

Quizplus · Accepted Answer

The law of supply states that as the price of a good or service increases, the quantity supplied of that good or service also increases, and vice versa, assuming all other factors are constant. It does not directly relate to the cost of producing additional output decreasing, which is more closely associated with economies of scale.

The Tendency for the Cost of Producing Additional Output to Decrease