Other things being equal, an increase in the price of a good leads to an increase in the amount produced. This is known as
A) the law of demand.
B) the law of supply.
C) ceteris paribus.
D) equilibrium.

Question

Quizplus · Accepted Answer

This is known as the law of supply, which states that as the price of a good increases, firms will increase the quantity supplied, ceteris paribus. This is because higher prices provide greater incentives for firms to produce more and earn higher profits.

Other Things Being Equal, an Increase in the Price of a Good