A producer of automobile batteries notes that the price of batteries has risen over each of the past three years. The firm decides to expand its battery production. This illustrates
A) the law of supply.
B) the law of market price.
C) the law of equilibrium.
D) the law of demand.
E) the law of supply and demand.

Question

Quizplus · Accepted Answer

The producer's decision to expand battery production in response to rising prices is an application of the law of supply, which states that as the price of a good rises, producers are willing and able to supply more of it.

A Producer of Automobile Batteries Notes That the Price of Batteries