Which of the following is an example of the law of supply?
A) The price of gum has increased so producers are making more gum.
B) The price of labor has increased and producers decrease supply.
C) The amount of a good purchased increases when the price decreases.
D) Producers provide less of a good when the price increases.

Question

Quizplus · Accepted Answer

The law of supply states that as the price of a good increases, the quantity supplied increases. This is demonstrated in choice A, where the price of gum has increased, so producers are making more gum to take advantage of the higher price. Choices B and D describe the law of demand, which states that as the price of a good increases, the quantity demanded decreases. Choice C also describes the law of demand, as it states that as the price of a good decreases, the quantity demanded increases.

Which of the Following Is an Example of the Law