The relationship between quantity supplied and the price of output is such that
A) an increase in quantity will automatically lead to a reduction in price.
B) an increase in price will lead to an increase in quantity supplied.
C) an increase in price will produce an inward shift in the supply curve.
D) quantity will decrease as the number of firms increases.

Question

Quizplus · Accepted Answer

The law of supply states that when the price of a good or service increases, the quantity supplied will also increase, all other factors being equal. This relationship is represented by an upward sloping supply curve. Therefore, an increase in price will lead to an increase in the quantity supplied.

The Relationship Between Quantity Supplied and the Price of Output