The law of supply exists because:

Question

Quizplus · Accepted Answer

The law of supply states that as the price of a good increases, the quantity supplied of that good increases. This is because as the price increases, producers have an incentive to allocate more resources towards producing that good. However, producing more of a good requires sacrificing the opportunity to produce another good, so the opportunity cost of producing each additional unit increases. Therefore, the law of supply exists because as additional units of a good are produced, opportunity cost increases.

The Law of Supply Exists Because