Supply curves usually slope upward because producers face increasing opportunity costs when increasing output.

Question

Quizplus · Accepted Answer

This is because with increasing output, producers have to allocate more resources (such as labour or capital) to production, which may involve sacrificing the production of other goods and services that they could have produced with those resources. This means the cost of producing additional units of the good increases, resulting in a higher price needed to cover those costs and still make a profit. Therefore, the supply curve slopes upward to reflect the increasing marginal cost of production.

Supply Curves Usually Slope Upward Because Producers Face Increasing Opportunity