The direct relationship between changes in price and changes in quantity supplied is
A) a change in supply.
B) shown by a shift in the supply curve.
C) the law of supply.
D) the law of relative production.

Question

Quizplus · Accepted Answer

The direct relationship between changes in price and changes in quantity supplied is known as the law of supply. As prices increase, suppliers are incentivized to produce more, resulting in an increase in the quantity supplied. Alternatively, as prices decrease, suppliers are less incentivized to produce, resulting in a decrease in the quantity supplied. This is demonstrated by a movement along the supply curve, rather than a shift in the curve itself (which would indicate a change in the quantity supplied at a given price).

The Direct Relationship Between Changes in Price and Changes in Quantity